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Demand for homes outweighs supply

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  • 05/09/2002
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The imbalance between the increase in household numbers and regional housing supply will widen shar...

The imbalance between the increase in household numbers and regional housing supply will widen sharply in the South of England over the next decade, according to think tank Cambridge Econometrics.

This will put greater upwards pressure on house prices, but is not enough to allow the current speculative housing bubble in the South of England to be sustained, it claimed..

The Regional Economic Prospects report stated: ‘If, as we expect, regional house price to income ratios return close to their historical trend ratios over the next decade, this will mean a substantial downwards adjustment in the current ratios in the South.

‘However, since there is little prospect of a sharp policy change [on house building] to trigger a rapid adjustment in the short term, the most likely outcome is a long stagnation in transactions as owners resist downward movement in prices by not selling.’


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