Housing Crash?

What a jolly way to start the week. The Telegraph gives us the news straight from the hip, the property market is heading for a fall in 2008.

The news coincides with the revelation that the average mortgage rate is over 7% whilst the amount of disposable income is the lowest for 25 years.

The 'guess' that the market will drop in 2008 is based on the increase of house prices, relative to the amount of earnings and cost mortgages. Factor into that the increase in the cost of living and the apocalypse is coming.

Meanwhile if things are that bad then why are the number of mortgage loans up again in January to 75,000, and the average cost of a house went up again in February to £172k. Another little statistic form Hometrack is the news that house sales in the South East are by far quicker than in the Midlands and North. It takes approximately 5.7 weeks to sell your pad in London compared to 7.9- 8.5 weeks in Birmingham.

If the research is correct then where do they factor in the Governments prediction that there will be an increase households by 223,000 by 2029. Let's not forget the likely house builders monopoly with the Taylor Woodrow and Wimpey merger and other acquisitions likely. It is not in the house builders interest to over supply the market is it?

Throw into the mix the continual rise in the buy to let market with over 850,000 buy to let mortgages in existence - which equates to just under 10% of the UK property market.

A serious meltdown in the market, will have major political ramifications at the start of a new leadership and a general election looming.

Add it all up and what do you get - no idea whatsoever.....