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UK at risk of housing market crash, says IMF

Britain may be in for a drop in house prices, in a situation similar to that currently being seen in the United States, the International Monetary Fund (IMF) has warned.The IMF said in its latest World Economic Outlook report that the UK was one of a number of European nations that could have to endure a crash in the housing market because of price correction.Also, the report highlights the dwindling affordability of housing in the UK, because of how much faster house prices have grown in comparison to salaries.Some hope is offered by the IMF, which says that the fact that housing markets in western Europe have mostly managed to steer clear of the sub-prime mortgage market, coupled with strong immigration and lack of supply, might just help to keep prices at their current level.The latest projection for UK growth is 2.3 per cent, down by 0.4 per cent from an earlier forecast, while the department for communities and local government has announced that the annual inflation rate for property fell from 12.4 per cent to 11.4 per cent in the year leading up to August.

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