Housing Market: February 2007
There are new reports that indicate there is a risk that the UK’s housing market is overvalued and heading for a “downward adjustment”, according to the International Monetary Fund (IMF).
The IMF stated that they used several indicators that suggest that the house price growth will continue to increase and that properties are “likely overvalued”.
“In light of estimates that house prices are already overvalued, this would increase the subsequent risk of an abrupt downward adjustment,” the IMF stated.
Nationwide claims that the average house price in the UK has reached £174,706 in February. The annual house price inflation rose to 10.2 per cent.
A spokesman for the Treasury said that the economy has experienced economic growth for 58 successive quarters and that the UK continues to meet “strict” fiscal rules, according to a report in the Telegraph.
There are several intangible indicators that will have an impact on the housing market. The most prevalent indicator is the introduction of environmentally friendly homes.
The introduction of these new homes will have a direct impact on the types of homes that will continue to increase in value. These news homes emit less emissions and fewer product waste.
Britain has already seen the introduction of eco-towns that are hailed as prototypes for future developments. Currently, 45 councils have already instigated plans to create eco-homes.
Consumers who are interested in building wealth are looking at methods of improving their current homes, before selling them, so they will receive the bonus sale’s value of having an eco-home.