Saturday, Oct 03, 2009

In UK measure of affordability is still nearly 60% above its level in 2000

Economist: House Proud

"In Britain prices fell by around 11% in the year to the second quarter of this year but are still slightly higher than in the third quarter of 2003. In America the Case-Shiller index of national prices is back to where it was in the fourth quarter of 2000. And, despite the falls, the ratio of average prices to average incomes, a measure of the affordability of housing, is still nearly 20% above where it was in 2000, a few years into the house-price boom. In Britain, this measure of affordability is still nearly 60% above its level in 2000. ........The IMF argues that although house prices have already fallen by 20%-close to the historical average–“there could still be significant corrections to come”. This conclusion will not please those hoping for a sharp recovery."

Posted by sybil13 @ 11:37 PM (973 views)
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5 Comments

1. devo said...

They know something is very wrong, but aren't sure how to articulate it.

Saturday, October 3, 2009 11:35PM Report Comment
 

2. cyril said...

If a 'false' recovery means it's being engineered by the government and the banks in cahoots, what's wrong with that? The alternative isn't very attractive for most people. I think the next generation of politicians might make some radical changes but I can't see D Cameron & co doing anything much. He's basically just a PR man from the same mould as Tony Blair. I reckon the much-hoped-for crash will turn into stagnation, and we are in for a very boring few years.

Sunday, October 4, 2009 10:29AM Report Comment
 

3. taffee said...

without first time buyers being able to buy and instead the bottom of the market supported by investors...i.e people betting on prices increasing,it is no better than a giant ponzi scheme or tuplips from amsterdam

Sunday, October 4, 2009 10:58AM Report Comment
 

4. mander said...

Basiclly in the rest of the world the property is 20% overvalued and in the UK is overvalued by 60% and so now all the media is trying hard to make buyers think that the crush is over. Making young families to take on 60% more debt is what the next goverment should not allow to happen.

Sunday, October 4, 2009 11:10AM Report Comment
 

5. fallingbuzzard said...

As usual the problem is with average incomes. This takes no account of the distribution of average incomes. Nowadays, most people earn less than the average income because high end salaries have become disproportionate

Sunday, October 4, 2009 10:06PM Report Comment
 

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