Surreal Estate: How far will house prices fall?
Many Happy Returns
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Price to Income Ratios - What's an Optimistic Case?
The house price to income ratio is pushing 7% in the UK, which is the highest it's been since 1980. So if you extrapolate those two variables, our central case is that the house price toincome ratio kind of drifts downwards slowly. The pessimistic case is that it's going to fall by about 7% per year. That doesn't seem unreasonable as a pessimistic case to me. I think we'll just bring us back into line with where we were in the mid 2010s.
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