Attachment
“Sun Worldwide”, the Asian-based boutique brokerage believes news that U.K. mortgage approvals rose in July to the highest level since February 2008, should not be taken as a harbinger of recovery in what was Europe’s most over-priced property market.
Analysts close to “Sun Worldwide” suggest that prices will need to come down to reflect affordability based on 3 or 3.5 times the average income before the slump in the market can be considered over.
Britain’s housing market imploded in mid-2007 after the onset of the global credit-crunch when buyers and lenders who had assumed the seemingly inexorable rise in prices was attributable to imbalances in supply/demand dynamics learned that it was, indeed, the widespread oversupply of poorly considered credit facilities that had spurred the market’s impetus.
“Sun Worldwide” analysts believe that continuing rising unemployment and poor economic performance will impact upon the property market by the final quarter of 2009.
The persistence of a low interest rate environment has been credited with the rise in buying activity but “Sun Worldwide” believe that the bond markets may force a rise in base rates as the nation continues its program of quantitative easing which is serving to dampen investor enthusiasm for UK debt offerings.
Photo:
http://www.prlog.org/
