It "remains to be seen" if unemployment will affect house prices

Posted: 25 Aug 2009 10:10:03 GMT

Continuing challenges in the property market are causing speculation as to whether unemployment will have an effect on house prices.

This is according to Bovis Homes, which announced that it was taking a cautious approach to pricing and mortgage evaluations as the company was concerned about rising unemployment.

However, Selwyn Lim, director of Mouseprice.com, stated that although this view has been taken by some industry figures, it will "remain to be seen" how unemployment will affect the market.

"Typically, if the past is anything to go by, [unemployment] is the last indicator that tends to keep heading downwards while there is a turnaround in other indicators," he explained.

He went on to say that currently, some industries are beginning to report positive news and the property market is seeing a slight upturn, however, some "pessimists" are predicting that these signs of recovery are only short term.

Unemployment reached 7.8 per cent in the UK in the three months to June, according to statistics published by the Office for National Statistics.


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