Wednesday, Jul 30, 2008
Britain has outstanding mortgage debt equal to more than 50 percent of GDP
Reuters: House prices have further to fall
S&P said the average cost of a house would revert to about 4.4 times average annual earnings -- near back to where it was in 2000 -- if prices fell by 25 percent overall.
Posted by peter_2008 @ 05:30 PM (216 views) Add Comment
3 Comments
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1. Jayk said...
"S&P said the average cost of a house would revert to about 4.4 times average annual earnings -- near back to where it was in 2000 -- if prices fell by 25 percent overall."
Prices would have to fall about 40% to get to the 4.4 multiple, assuming average earnings of around 26k and a peak house price of around 190k.
2. mark wadsworth said...
Houses were at the upper limit of affordability in 2000, heck knows how they sustained the boom for so long.
3. mark wadsworth said...
Re your title - o/s mortgages are about 80% of GDP. So 'more than 50%' is accurate but misleading.