UK Property market in peril - Houses 'overvalued by 20%'
Its almost like a devaluation of the pound. A few years ago 3 times your average earnings would amount to the property price. In London you will now be looking at 10 times average earnings for a one bedroom flat
House prices are 20 per cent overvalued and the economy and property market are among the most vulnerable in the Western world to interest rate rises, it was claimed.
They believe a combination of unsustainable house prices, record personal debt and rising interest rateshas created a potentially explosive cocktail.
The Fitch research, which assessed 16 major economies, suggests that the current average house price of some £211,000 is overvalued by more than £40,000.
It says the problem stems from the fact that house prices have risen some 210 per cent in the last ten years, while incomes have grown by a much lower 53 per cent.