Tuesday, June 3, 2008

UK House Prices to Fall by 29%

Housing Market Boom and Bust Cycles Driven by Real House Price Values

Real UK houseprices as measured by average earnings are £50k below actual house prices.

Posted by nadeem walayat @ 08:48 AM (473 views)
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4 thoughts on “UK House Prices to Fall by 29%

  • mark wadsworth says:

    Correct. The long run average is about 30% less than where we are now and the troughs (as reached in the 1950s, 1970s and 1990s) are about 40% to 50% less than where we are now.

    We’re down by 10% in RPI adjusted terms since last October, so we’re a quarter of the way there.

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  • Surly that should be 29.1%?

    Conservative estimate IMHO.

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  • japanese uncle says:

    Whatever mantra they murmur like 29% or 25% or 30%, house prices will drop by 65% on the average, 75% in London, unfortunately. Forgone conclusion. Period.

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  • crash bandicoot says:

    Are they suggesting that £143k is where the average price will end up? That still requires a ~£40k salary with a 3.5x mortgage. I have two issues with this first 3.5x is not the historical average it is the historical MAXIMUM loan. I have said many times before that all the repo’s from last time round were “only” 3.5x salary mortgages or less. Secondly once interest rates go up to contain inflation nobody will be able to afford the monthly payment at this level anyway. I’m with JU a 50% drop is the minimum to reconnect prices with wages. It is sure to overshoot.

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