Housing market risks in the United Kingdom

Robert F. Martin ()

No 954, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: House prices in the United Kingdom rose rapidly in recent years. The run-up, larger than any other in U.K. history, leveled off early last year. House prices are currently declining at rates faster than those seen in the early 1990's downturn. The housing downturn, however, is far from complete. Using the price-rent ratio as a guide, house prices are likely to fall at least a further 30 percent before leveling off. Given the historic links between housing and real activity, the downturn is likely to be associated with very slow growth. Going forward, we recommend the price-rent ratio as the appropriate measure of housing valuation.

Keywords: Housing; -; Prices (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-ure
Date: 2008

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