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Why did investors chase property prices to ridiculous heights?

If you look back at the summer of 2007, commonly referred to as the peak in the UK property market, it shows a market which was flying high with not a cloud in the sky. Despite the fact that many experts believe that property prices in the UK were substantially overvalued, the headlines talked of a boom in the sector and investors and homeowners were desperate for a slice of the action. So why did property investors chase prices to ridiculous heights?

If you look back through time you will see a common pattern in the UK property market whereby the UK authorities have always had control of the supply and demand factor. It is common knowledge that the UK government has for many years undersupplied the market when demand was there in order to keep prices "artificially high". Despite the fact that the UK authorities, whether Conservative, Labour or any other political party, are now blaming property investors and banks for the ongoing issues in the property market, they have all championed the sector in the good times.

The old saying that bricks and mortar are the best investment you will ever make have come back to hit many people are very hard and while over time this may be correct, we are seeing ever more volatility in the sector and more and more people struggling.

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