'Vanished' Housing Bubble May Be a Dangerous Illusion

Scotland on Sunday › January 30, 2006

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Summary

IF THERE is one certainty in economics, it is that the biggest problems can be made to disappear depending on the statistics used. We may now have reached that point in the UK housing market where the "problem" has been made to vanish. Has not even Roger Bootle, the last housing bear, growled in retreat and thrown in the towel?

The consensus view is that a house price crash has been averted and the Bank of England has achieved a "soft landing". The house price bust has not materialised. The threat is now seen to be behind us.

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Extract

'Vanished' Housing Bubble May Be a Dangerous Illusion

But might not the opposite be true? Far from the threat of a house price boom and bust having subsided into the past, it remains one of the most potent reasons for the Bank's Monetary Policy Committee not to cut interest rates this spring. The bubble risk is not buried behind us. It is still very much "o...

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