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Britain Faces A Worse Housing Crash Than Us

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Many thanks Panda. Amazing to see it so bold isn't it. I noticed everyone gazing at it nervously at the cafe, no one daring to pick it up and read it, just in case it blew their mind.

Well is on par with magic mushrooms for a trip! ;)

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Britain faces worse housing crash than US

Wednesday, March 19, 2008

House for sale mortgage

Britain could follow the US into severe economic slowdown – and see an even worse house price crash, experts have warned.

Parallels between consumer spending in the two countries are 'disturbing', said the respected financial forecaster Capital Economics.

A main cause of the US slump has been falling house prices, which are now being seen here too – but the British market is even more vulnerable and could fall more sharply, it added.

People here also owe more than Americans, with household debt running at 175 per cent of disposable income, compared with only 128 per cent in the States.

There is a stronger link between house prices and consumer spending in Britain than the US, suggesting our economy is at greater risk from falling property prices, said Vicky Redwood, UK economist at Capital Economics.

Britons also pay more tax and do not enjoy the same interest rates as in the US, where they were cut to just 2.25 per cent on Tuesday.

Ms Redwood said: 'We expect UK consumer spending to rise by just 1.5 per cent or so in real terms this year, a slightly bigger rise than is likely in the US.

'But, whereas US spending growth could start to recover next year, UK spending growth looks likely to slow further. With both countries the main risks lie to the downside.'

The consultancy, led by one of the City's leading economists, Roger Bootle, has long been predicting that the British house price boom would come to an end.

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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