{"id":114,"date":"2007-07-30T13:19:29","date_gmt":"2007-07-30T13:19:29","guid":{"rendered":"http:\/\/www.the-finance-zone.co.uk\/uncategorized\/uk-housing-market-is-overvalued\/"},"modified":"2007-07-30T13:19:29","modified_gmt":"2007-07-30T13:19:29","slug":"uk-housing-market-is-overvalued","status":"publish","type":"post","link":"https:\/\/the-finance-zone.co.uk\/index.php\/2007\/07\/30\/uk-housing-market-is-overvalued\/","title":{"rendered":"UK housing market is ‘overvalued’"},"content":{"rendered":"

UK house prices are at least 20% overvalued compared with their long term average, according to credit rating agency Fitch.<\/span><\/strong> <\/span><\/span><\/p>\n

Fitch, which judges how risky debt is, looked at how house prices have raced away from incomes over the past decade. <\/span><\/span><\/p>\n

High levels of debt make the UK economy one of the most vulnerable in the world to higher interest rates, it added. <\/span><\/span><\/p>\n

Out of 16 countries examined, the UK economy was the third most sensitive to higher interest rates, Fitch said. <\/span><\/span><\/p>\n

‘Adverse shocks’<\/span><\/strong> <\/span><\/span><\/p>\n

Fitch looked at a combination of economic indicators to see where house prices were overvalued and which economies were at risk if interest rates rose. <\/span><\/span><\/p>\n

In addition, the group looked at what type of mortgage dominated the market. <\/span><\/span><\/p>\n

Countries where variable rate mortgages are in vogue, such as the UK, would feel a greater impact from higher interest rates, Fitch said. <\/span><\/span><\/p>\n

New Zealand and Denmark, which have both seen house price booms and increasing levels of personal debt, were the two most vulnerable to higher rates, followed by the UK. <\/span><\/span><\/p>\n

At the other end of the scale, consumers in Italy, Germany and Japan were the least likely to suffer if interest rates rose and debt became harder to manage. <\/span><\/span><\/p>\n

This is because consumers in these countries have not seen house prices or debt race away from incomes to the same extent as the UK. <\/span><\/p>\n

Borrowing up<\/span><\/strong> <\/span><\/span><\/p>\n

Meanwhile, the Bank of England (BoE) said on Monday that UK mortgage lending had picked up sharply in June, indicating continued housing market growth. <\/span><\/span><\/p>\n

Total mortgage lending rose by \u00c2\u00a39.6bn in June, up from \u00c2\u00a38.7bn in May. <\/span><\/span><\/p>\n

The number of mortgage approved was the same in June as in May, with 114,000 new home loans given the go ahead. <\/span><\/span><\/p>\n

The lending figures were stronger then most analysts expected. <\/span><\/span><\/p>\n

“Mortgage lending is holding up well in the face of higher interest rates and mortgage approvals are still robust,” George Buckley an analyst at Deutsche Bank said. <\/span><\/span><\/p>\n

“We expect some weakening in these numbers towards the end of the year, but for now the market seems to be holding up well,” he added. <\/span><\/span><\/p>\n

\n

source: bbc.co.uk<\/p>\n","protected":false},"excerpt":{"rendered":"

UK house prices are at least 20% overvalued compared with their long term average, according to credit rating agency Fitch.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[23,48],"tags":[],"class_list":["post-114","post","type-post","status-publish","format-standard","hentry","category-house-market","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=114"}],"version-history":[{"count":0,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/114\/revisions"}],"wp:attachment":[{"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/the-finance-zone.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}