The full analysis, posted on www.mortgageintroducer.com by Open University Business School economist Martin Upton has led to brokers inundating the website with responses.
In his conclusion Upton said: “An end to rampant house price inflation is not a precursor to a collapse in house prices, because this would fly in the face of current economic realities.
Over the year as a whole, prices will remain largely unchanged. My forecast for the housing market in 2005 is of bright intervals and scattered showers rather than storm clouds.”
Responses to the analysis included: “A thoroughly rational and cogent analysis. Our fundamentally stabilised market has come about by the freeing of the Bank of England from political manoeuvrings.
“Also the market is further underscored by a fundamental public lack of faith in stocks and fear of pension shortfalls.”
Other responses said: “The market will crash. People seem to forget the lessons of the past.”
“Mr Upton must be living on another planet or is vastly overpaid if he believes his ratio of average earnings to house prices.”
“At last an unbiased and educated view of the housing market.”
“For an accurate view of the market a less general view needs to be looked at and how this will affect buying into the market in the future. Mr Upton’s assessment does not take into account the statistics for first-time buyers only, and these are the ones that will eventually keep the market moving in the future.”
“Some people live in a dream world. The housing market is on its way down, of course all the major estate agents, lenders, etc will say otherwise they would be stupid not too.”
