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MARK AUSTIN THOMAS: Housing prices may be falling in America but not in Britain. In the UK real estate has shot up in value. From London, Stephen Beard reports.
STEPHEN BEARD: British house prices have defied all the many predictions of a crash. Having more than tripled over the past decade, they’ve jumped 1.3% this month alone and more than 8% in the past year.
That brings the average price of a home to $314,000, more than six times the average annual wage.
Just why the British market is so much more buoyant than America’s may be due to the UK’s relatively low interest rates, says Ed Stansfield of Capital Economics:
ED STANSFIELD: The Bank of England’s policy rate is very low and certainly that hasn’t been raised anything like as aggressively as American interest rates have been raised over the last couple of years.
But, he says, the two housing markets could be linked. If there’s an all out crash in the U.S., that could lead to an American recession. And since so many British companies and jobs depend on the U.S., that could finally trigger a fall for British real state.
In London, this is Stephen Beard for Marketplace.
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