Brown defends stability of UK property market

25 April 2004
Chancellor of the Exchequer Gordon Brown yesterday downplayed suggestions Britain was heading for a major housing crash.

Speaking at a spring meeting of the International Monetary Fund (IMF) and World Bank in Washington DC, Mr Brown doubted whether house prices would plummet in the short term as debt repayments compared to incomes remained low.

Mr Brown's comments came after a host of conflicting messages on the UK housing market in recent weeks.

First off, the IMF reported there was a possibility of an "abrupt correction" in the UK housing market.

Goldman Sachs has forecasted a fall in prices of 10-15 per cent over two years beginning late 2004.

Meanwhile, Rightmove, the property website, said house prices were rising at £150 a day.

But the latest survey from the National Association of Estate Agents said warnings of an imminent crash in house prices were "detached from reality."

Mr Brown told delegates: "While house prices have certainly risen, as everybody knows, what is also the case is that people's debt servicing payments, mortgage payments as a share of their income are still far lower than they were 10 years ago."

The price of an average home in the UK now stands at £184,582 - a 50 per cent rise from the start of 2002.