House Prices

The National Institute of Economic and Social Research, a respected think tank, predicts that house prices will start to fall again, perhaps up to 30% over the next few years, after adjusting for inflation. It argues that prices are still too expensive and must continue to adjust downwards.

Sensibly priced housing, which performs efficiently its primary task of putting a roof over the population’s head, is a critical component of a restructured  economy which can make things competitively and provide quality services which people can afford. So long as houses are regarded as an inflatable asset, like a party balloon, there will be no sustained, or sustainable, recovery.

NIESR’s apparently gloomy prediction is, in fact, good news.