UK housing market steady

www.moneynews.co.uk > Housing market > UK housing market steady

UK housing market steady

Wed 23rd Mar 2005

According to two leading analysts a sudden drop in the UK housing market this year is unlikely. The projections follow yesterday's warning from the Treasury that a crash was likely.

Kate Barker, a member of the Bank of England's monetary policy committee, which sets base interest rates, was commissioned by the government to investigate whether there was a housing price bubble.

In an extract from the report Ms Barker said: "There are some signs which might indicate a housing bubble - increased private buying of housing for letting with the expectation of capital gain, and parents using equity from their own homes to assist children with deposits - but it is not clear how far these may have contributed to higher prices."

Stuart Law, managing director of property group Assetz, also rejected the Treasury's warning.

"With prices currently so high, serious investors have diversified their portfolios into commercial or overseas properties.

"However a drop in house prices would increase yields igniting a surge in the residential buy-to-let market. This would of course then cause prices to creep up again to previous levels hence providing a floor to price drops not far below where we are today."

Related News : Housing market
	Nationwide housing market report 'shows little progress'
	Nationwide housing market report suggests people value rail proximity
	Halifax housing market study 'shows slowdown in price growth'
	Positive news for 'nearly all' UK regions, according to Nationwide housing market document
	Nationwide housing market research 'shows stable picture'
	Firstrung: Abolition of Hips 'has had no impact on housing market'
	CIH: Parents question children's ability to take out a mortgage
	Rightmove: UK house price growth slowing down
	Halifax highlights popularity of coastal properties
	Santander claims HIPs were 'headache' in the housing market