Thursday, November 5, 2009
Allister Heath talking sense (for a change)
"Earlier this year, I wrote a column in this space arguing that the housing market in the UK was no longer over-valued, based on historic price to earnings ratios and a range of other evidence, including the fact that yields on rented flats were higher than mortgage payments again. I spoke too soon. Since then, house prices have jumped by about five per cent, taking the trough-to-peak rise this year to around seven per cent, which is ridiculous and cannot be justified by the fundamentals. Unfortunately, this means that house prices are now clearly over-valued again, with home owners and investors convincing themselves that property is once more a one-way bet (a deeply dangerous conceit)...."