Alistair Darling, the Chancellor of the Exchequer, has stated that there are a number of factors that make the likelihood of a house price crash in the UK a slim one.
He said that the UK was far less likely that the UN to suffer a house price crash due to factors such as low unemployment, a shortage of housing, and reduced interest rates. Darling said that despite the fall in house price inflation that has been seen over recently months he remained confident about the housing market.
The chancellor said that it was unlikely that there would be a house price crash similar to that seen in the 1990s, stating: “Market conditions today are very different from those we saw in the early 1990s.
Interest rates remain at comparatively low levels - as do mortgage rates. And unemployment is currently at 30-year lows.”
He also said: “What’s more, there are important differences between the housing market in the US and the housing market here.
While many US mortgages were sold at hugely discounted rates, leaving people unable to meet repayments when rates increased, lenders in the UK have been more responsible in taking account of an individual’s ability to pay. And demand for housing outstrips supply.”
House price inflation has been falling over recent months, and a number of industry professionals have predicted that house price inflation will stagnate this year. The governor of the Bank of England has also told homeowners to brace themselves for a house price fall in real terms over the coming years.
Leave a Reply