UK House Prices Remain Overvalued

UK House Prices Remain Overvalued - at www.moneyweek.com - the best of the international financial media

The housing market correction may have a long way to go. Near term, the outlook for house prices, for transactions levels and for mortgage lending is significantly cooler than we have seen over the past five years. In our view, UK house prices probably remain overvalued, perhaps significantly so.

Updating our study from October last year, we find that many of our valuation measures suggest, if anything, an even greater degree of overvaluation now than last autumn. The longer-term outlook for owner occupation, demand for rental properties and the level of lending remain healthy, but over the coming year or so, falls in house prices would be unsurprising.

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