MPC: House prices could fall up to a third

  • Story by: Helen Burggraf
  • Magazine: InvestmentAdviser
  • Published Thursday , May 01, 2008

A correction of approximately one-third in house prices could be on the cards in the next two to three years, Monetary Policy Committee (MPC) member David Blanchflower has warned.

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House price to earnings ratios must come down from more than six times earnings, to "more sustainable levels" of around four times, he noted in a speech on Tuesday (29 April) in Edinburgh.

"I am not suggesting that such a drop will necessarily occur, but it may," Blanchflower said.

He has been among the MPC members most consistently pressing for interest rate cuts.

For more information, read 5 May's edition of Investment Adviser.

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