The Ernst and Young ITEM club have produced an economic report that claims that the current bouyancy in the UK housing market is a false dawn. The club forecasts that prices will soon start to fall again and that they wont return to the peak price levels of 2007 until 2014.
Recent price rises, seen since the spring, have been driven by a shortage of properties. At some point the immediate shortage will be over and the underlying recessionary conditions will put a dampener on the ability of buyers to raise bids.
At current mortgage interest rates, home buying is currently more affordable than at any time in the previous 7 years. HSBC recently a 1.99% mortgage product for those buyers who can afford a 40% deposit.
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