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Barely a day goes by still without some industry body or company releasing a press release on the state of UK house prices and because UK home ownership is at one of the highest levels in Europe, there are plenty of eager readers and listeners. But the companies releasing these announcements are normally doing so because they have a vested interest. They come from estate agency bodies, mortgage companies, home builders and surveyors, all of whom stand to lose out if the property market in the UK slows down significantly.
Too often these companies are expressing their assessment of the market in terms of changes in growth rate not changes in prices. Growth rates have certainly come right down; after all they were running at unsustainable rates of 10 percent per year. Anyone who thought that would contain must have been wearing rose-tinted glasses or were perhaps one of the thousands of buy-to-let profiteers who have materialised over recent years. But actual house prices have hardly moved downwards yet and they may not do if further interest rate cuts are announced soon, making mortgages and loans cheaper for both new customers and existing customers on variable rate arrangements.
One mortgage company told us that the drop in demand had almost bottomed out, yet a chief economist said that the housing market was still under substantial pressure. So the situation is still very unclear.
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