With the price of houses in the UK now standing at nine times the average salary, the IMF has finally decided to suggest that there is a high risk that property prices in the UK may fall.
In their view house prices are overvalued by 40%.
However, the report ignores the fundamental structural weaknesses of the UK housing market which in fact underpin the prices:
1 There is a shortage of supply
2 There is an inherent desire to own property
3 There is a large variety of readily available mortgages
4 There are large numbers of wealthy foreigners seeking property in the UK
5 City mega bonuses are distorting the London market, the ripples from which affect the rest of the UK
Only when the above 5 points have been reversed, or nullified, will the property market crash.