View more on these topics

IMF says property crash is inevitable after price spiral

The International Monetary Fund has predicted a crash in the UK housing market after decades of price increases that have outstripped other economies.

The IMF&#39s world economic review warns of a fall in prices in response to interest rate rises but the National Association of Estate Agents has attacked its analysis as incorrect and “needlessly scaring homeowners”.

The IMF claims a crash is inevitable as UK house prices have risen faster since 1997 than in any industrialised country except Ireland.

The report says in countries where prices have risen significantly there is “a danger that higher interest rates could trigger a much bigger downward adjustment in house prices, with considerably more severe consequences for real economic activity.”

NAEA chief executive Peter Bolton believes if rates go up at all in November it will only be by 0.25 per cent and this would the peak. He concedes there is a slowdown in the market and its monthly housing report shows the average property price for August was down by 1.25 per cent from July.

Nearly 80 per cent of estate agents believe that house prices have reached their highest point and will now decline.

The Council of Mortgage Lenders says gross mortgage lending slowed to £25bn in August, 13 per cent lower than July&#39s £28.9bn.

NAEA chief executive Peter Bolton King says: “Incomes in this country rise by 4.5 per cent a year on average. If house prices remain pretty static over four years, then house prices will come back in line with incomes and we believe this will happen.”


Close Finsbury views panorama of assets

A new generation of multi-asset portfolio has been launched by Close Finsbury Asset Management. The portfolio will produce capital growth by investing in global assets, including long and alternative investment strategies with a focus on total returns. It will cover a mix of UK and global equities, fixed interest, commercial property, structured investments, alternative investments, […]

Norwich Union term and mortgage life insurance reprice

Norwich Union is repricing its term and mortgage life insurance as of October 4. Term assurance will on average decrease by 0.45 per cent. Mortgage life assurance – no options – will decrease on average by 1.67 per cent. Mortgage life insurance with guaranteed critical illness option will decrease on average by 3.8 per cent. […]

A&L chief in warning over loan network sizes

Many mortgage networks are not portraying their membership sizes accurately, according to Alliance & Leicester head of intermediary mortgages Mehrdad Yousefi. Yousefi says that with auth-orised representatives yet to make up their minds on whe-ther they will join a network or become directly authorised, there is a danger of networks not being able to validate […]

Sofa wins deal with NCG on lower PI rates for members

Sofa is to offer lower professional indemnity insurance premiums to members through an arrangement with NCG Professional Risks to be launched at Sofa&#39s November conference. NCG has agreed with a several underwriters that Sofa qualifications and the professional conduct that membership implies will be taken into account as a factor when assessing premiums for PI […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm