House price boom could end in tears

property

By cutting interest rates to stimulate the economy at the beginning of 2001, the MPC brought about a boom in household debt and house prices that shows little sign of abating but that are unsustainable in the long term

Economics can be a dry subject and economists a dismal bunch but there is one subject people are always keen to hear their views on: the housing market. The British obsession with the price of their houses is legendary and the TV schedules are testament to the fact we now prefer talking about our houses even to discussing weather. The rapid rates of house price inflation over recent years have seen this obsession grow. Recent discussion has focused on the sustainability of the current level of house prices and whether some kind of crash is inevitable. The state of the housing market is als...