Thursday, Sep 14, 2006

Even the IMF is worried

The Times: House prices far too high, warns IMF

HOUSE prices in Britain are still too high, the International Monetary Fund said yesterday.
The IMF said that last years sharp downturn in property prices, which followed three years of double digit increases, had failed to restore balance to the market. British homes, it said, still seem over-valued by most conventional measures.


Britain



The Times September 14, 2006


House prices far too high, warns IMF as upward surge resumes
By Gary Duncan, in Singapore



HOUSE prices in Britain are still too high, the International Monetary Fund said yesterday.
The IMF said that last years sharp downturn in property prices, which followed three years of double digit increases, had failed to restore balance to the market. British homes, it said, still seem over-valued by most conventional measures.



The warning came amid new evidence of surging activity in the housing market, with property prices rising at their fastest for more than two years.

The Royal Institution of Chartered Surveyors said that a hike in interest rates last month had failed to deter buyer inquiries from rising at the fastest rate for three years. House prices grew for the fifth consecutive month in August at the fastest pace since May 2004.

Price rises were led by Scotland at its fastest pace in two years, with the North West, Yorkshire, Humberside and Wales also experiencing growth. Prices were static in the West and East Midlands which may have been held back by the impact of struggling manufacturing industries.

The institution is sceptical about whether the acceleration can continue, with economists pencilling in another interest rate rise in November.

A spokesman said last night: Would-be buyers have been encouraged by a strong economic performance, but additional rises in rates before the end of the year could deter buyers as more pressure builds on personal finances.

This week it was announced that inflation had risen to its highest level for nearly two years and a survey suggested that up to 770,000 households have defaulted on mortgage payments in the past year.

There were also growing fears in financial markets that an abrupt slowing of Americas housing market could plunge the worlds biggest economy into a severe downturn, or even recession





Posted by little professor @ 09:45 AM (532 views)
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6 Comments

1. little professor said...

Sorry, I seem to have messed up this post big time and quoted almost the entire article. Admin/webmaster please feel free to clean up.

Thursday, September 14, 2006 09:50AM Report Comment
 

2. waitingfor hpc said...

what slowdown / correction last year in prices?????
sorry i must have blinked and missed that? ... and we are measure for a soft landing in the US??? we have not even started descending yet!

Thursday, September 14, 2006 10:58AM Report Comment
 

3. Bfskinner said...

it shouldnt be too suprising that a rates hike will led to a spur in inquiries as RICS report. with one hike and the expectation of more agents etc have been very good at the whole, buy now before its too late farce. some will inevitiably fall for it and further fuel the bubble

BFS

Thursday, September 14, 2006 12:38PM Report Comment
 

4. the bald man said...

What strong economic performance? We have borrowed more to spend which has generated illusory growth.

Thursday, September 14, 2006 12:42PM Report Comment
 

5. Bfskinner said...

bah!

the IMF what would they know? ;-)

BFS

Thursday, September 14, 2006 04:17PM Report Comment
 

6. Northernlad said...

Times don't report properly. A vested interest me thinks!

Thursday, September 14, 2006 09:26PM Report Comment
 

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