HSBC analyst warns of price decline

Posted: 09 Jan 2007 11:37:58 GMT

Another well-respected analyst has added their name to the list of economists predicting a less rosy picture of UK housing during 2007

Another well-respected analyst has added their name to the list of economists predicting a less rosy picture of UK housing during 2007.

John Butler, chief economist at HSBC, warned that prices are likely to decline over the year, citing increased borrowing costs and the impact of rising fuel bills.

He added that falling employment levels will also hit consumer confidence and willingness to take on record-breaking mortgages.

"I wouldn't expect house price inflation to carry on rising at this particular rate," said Mr Butler. "I think houses are overvalued relative to income and the costs of servicing, which are creeping higher."

Recent figures from Halifax showed that property prices fell one per cent during December, although it added that this would rise again following a seasonal lull.

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