Words: Ashley Rigg
Published: 14th September 2009
UK: False dawn for the housing market
The Ernst & Young Item Club say UK house prices will not return to their 2007 peak for at least five years. Despite reports of month-on-month rises over the summer months, Ernst & Young say these increases are unlikely to continue.
They put the recent rises down to increase lending to “a small number of cash rich buyers.” Prices are likely to dip again next year due to the "the scarcity of mortgage supply and tough lending criteria making it difficult for first time buyers to enter the market." First time buyers on average need a 25% deposit.
The fundamentals of the housing market are underpinned by the general economy and unemployment is still rising and credit is difficult to come by for many. The prospect of another period of rising prices where homeowners re-mortgage to fund the purchase of second homes abroad is still a long way off.
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