Wednesday, May 14, 2008
UK is suffering from ‘housing bubble’
Article from 2004 - locked up in this site's New Blog vault. Was nice to re-read the news. Amazing... Durlacher got it wrong by 5 years (as always with Economists who get the theory right but the timing wrong). Substitute 2004 for 2008 and you'll see what's unfolding in Britain today... "The possible slide in prices, Durlacher said, could be triggered by a combination of higher interest rates, increased lender caution and tighter regulation of the mortgage market. Overall, Durlacher predicts that house prices will fall by 30%, starting in the second half of 2004. Ominously, the report suggests the housing market bust could be "very messy. We expect transactions to drop sharply, mortgage lending to decrease by 55% and widespread mis-selling allegations."