The UK property market remains robust and is unlikely to suffer a fall despite recent predictions made by some 'doomsters', says the Centre for Economics and Business Research.
Instead, analysts at the CEBR forecast a "soft landing" if prices were to drop at some point in the future.
While 'doomsters' are right to point out that there are definite signs of overheated house prices, CEBR believes there are major signs suggesting current prices are just about right.
Shortgage of new homes and historic low interest rates are two factors propping prices further up.
CEBR says: "Because there are economic influences in different directions it is critically important that economists weigh together all the facts when trying to understand likely house price movements."
According to CEBR's Housing Futures model - which is taking into account different factors such as cost of building, household incomes, and demographic changes - UK house prices are currently within 2% of their equilibrium level. That means prices are just about "right", the CEBR says.
If prices were to rise, however, the market could expect a fall, the firm says. That said, the market is likely to experienced a soft landing rather than a collapse, which the CEBR believes is unlikely to happen.IFAonline
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