House Price Crash, can it happen?

D S Patterson

THE IMF AGREE WITH ME - SO THERE! :-)



IMF adds pressure to moves for new interest rate jump
• Record monthly mortage lending
• Spending surge in the high street

The threat of an increase in interest rates in the new year grew yesterday after the IMF sounded a warning that another rise may well be needed and key data pointed to buoyant conditions in the high street and housing market.

.....slow down…..what if we hit a bump!

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Property price inflation focused on first time buyers

Over the 12 months to November 2006, the average first-time buyer property value searched against on Moneyextra.com's mortgage comparison tool rose by 14.05% to £182,113 - that's more than twice the rate of property price inflation across the whole housing market. It compares with a rise of just 6.27% to an average £268,201 for those looking to move to a new home (which is actually down by a marginal £307 on October 2006).

The overall rate of increase in house prices in November 2006 was an annualised 6.7%, but the average amount being borrowed has risen by 8.8% in the last 12 months.

"House price inflation is being outpaced by the rate at which were going deeper into debt to afford the roof over our heads," says Robin Amlôt of Moneyextra.com.

Once again, the brunt is being borne by first time buyers (FTBs) with the average amount borrowed by FTBs in November 2006 up by 9.9% on year ago levels, compared to an increase in borrowing by home movers of just 7%.

The average value of mortgages completed by AWD Moneyextra customers in November was £140,664.09. The overall average value of loans completed during the first 11 months of the year (Jan-Nov 06) was £141,895.00.