Sunday 11 July 2010

The Economist: UK houses 33% overpriced

The Economist magazine has produced a table comparing rents with house prices to give an idea of fair value in different countries. According to this, the average UK house is 33% overvalued, or in other words should drop 25% to return to its long-term price/rent ratio.

A word of warning: Mike Shedlock (where I found this) points out that the US is too diverse to make these statistics precise and universally applicable. I would say the same for the UK, small as we are. Nevertheless, it corroborates my feeling that houses are generally still too expensive here.

Addendum (19:37): Charles Hugh Smith gives some reasons why owning a home may not be the Holy Grail, anyway. I was suggesting selling up and buying a caravan to my dearest some years ago, but women love plumbing.

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hatfield girl said...

I bet they aren't over-priced in Acocks Green though. But if Brum is ever linked effectively to London with a proper road and rail sevice (after all its only 110 miles) there is a housing stock there that is grossly undervalued. Birmingham suffers from chilternsblight.

Sackerson said...

How lovely to hear from you, HG. How are you?

Good point about Bham getting drawn into the Golden Triangle - probably just after we move.

But houses still overpriced here, too, a bit - 3 bed semis, anyway.