Friday, January 4, 2008
Are you sure? (apologies if this article has already been published on hpc)
How stretched is the UK housing market? Given how long UK house prices, especially those in London, have defied both gravity and conventional models of valuation, a confident answer to that question is hardly possible. A look at a couple of the conventional “affordability” measures suggests, however, that – in MPC speak – “the balance of risk to house prices is skewed to the downside”. In English, house prices are more likely to fall sharply than to rise steeply.