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    4. If house prices did start to slow down it could encourage speculators to sell causing a big fall in house prices.

    However recent evidence counteracts these pe

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    There have been many reasons why economists have been predicting a gentle slowdown in UK housing prices. Groups such as Capital Economics have long argued that house prices are overvalued. Reasons for this include.

    1. House prices have risen faster than earnings, making it more difficult for people to afford mortgages, especially first time buyers.

    2. Increase in credit levels means any rise in interest rates is likely to have a significant effect on reducing demand for houses.

    3. The value of buy to let is decreasing. This is because house prices are rising faster than rentable incomes. The returns form buy to let is becoming lower so there is less incentive for people to buy for this reason.

    4. If house prices did start to slow down it could encourage speculators to sell causing a big fall in house prices.

    However recent evidence counteracts these pe

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    1. House prices have risen faster than earnings, making it more difficult for people to afford mortgages, especially first time buyers.

    2. Increase in credit levels means any rise in interest rates is likely to have a significant effect on reducing demand for houses.

    3. The value of buy to let is decreasing. This is because house prices are rising faster than rentable incomes. The returns form buy to let is becoming lower so there is less incentive for people to buy for this reason.

    4. If house prices did start to slow down it could encourage speculators to sell causing a big fall in house prices.

    However recent evidence counteracts these pe

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    2. Increase in credit levels means any rise in interest rates is likely to have a significant effect on reducing demand for houses.

    3. The value of buy to let is decreasing. This is because house prices are rising faster than rentable incomes. The returns form buy to let is becoming lower so there is less incentive for people to buy for this reason.

    4. If house prices did start to slow down it could encourage speculators to sell causing a big fall in house prices.

    However recent evidence counteracts these pe

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    sing. This is because house prices are rising faster than rentable incomes. The returns form buy to let is becoming lower so there is less incentive for people to buy for this reason.

    4. If house prices did start to slow down it could encourage speculators to sell causing a big fall in house prices.

    However recent evidence counteracts these pe

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    4. If house prices did start to slow down it could encourage speculators to sell causing a big fall in house prices.

    However recent evidence counteracts these pessimistic forecasts. The housing market remains remarkably resilient with house prices rising by 10.5% in 2006. In addition The British Bankers' Association said demand for mortgage home loans was still growing. They are more than 9 per cent ahead of last year. This means demand is still strong. This suggests the moderate rise in interest rates in August had little effect on cooling the market. This is perhaps because consumers think that mortgage interest rates rises have peaked and are unlikely to rise further. This view on interest rates is shared by the Nationwide building society who have predicted that interest rates have peaked. They also predict house prices are likely to rise by 8% in the next year

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