Property News

Monday, April 02, 2007

Experts predict fall in 2008

According to experts reporting to the Daily Telegraph, the housing market is heading for a fall next year, after it emerged that property is at its most overvalued level in more than 15 years.

Soaring prices are putting properties out of reach for many, with unaffordability reaching the worst level since the end of the last major crash. The warning coincides with news that the average mortgage rate has reached seven per cent, with millions of households paying well above the Bank of England's 5.25%.

With the Bank expected to increase borrowing costs for the fourth time in a year - possibly as soon as Thursday - economists have sounded the alarm over the market's strength. This comes after the revelation that disposable incomes rose at the slowest rate in 25 years in 2006.

Experts say the country is divided into three distinct markets. While prices in London and the South East soar because of a shortage of prime property and a glut of money flooding in from City workers, most of the rest of the country has seen prices barely move over the past year.
Meanwhile, Northern Ireland is enjoying the biggest property boom in Europe because of the peace dividend and an influx of public sector money.

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