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Credit Crisis Could Torpedo UK Housing Market, Too

Prices more inflated than US, agency warns

By Sam Gale Rosen,  Newser Staff

Posted Oct 17, 2007 3:14 PM CDT

(Newser) – Britain risks its own housing price crash, according to an International Monetary Fund report. The UK is in a credit crunch similar to the ongoing US version, and its housing is more overpriced than the US market before the crisis. In fact, "a number of advanced economies' housing markets … could be vulnerable to a correction," the group worries.

The IMF says there's still hope Europe could avoid America's fate, the Guardian reports. "First, housing markets in western Europe have generally avoided sub-prime mortgage origination and the deterioration of lending standards observed in the US," the report says. The risk is that the credit situation in Europe could worsen, triggered by US conditions.

General view taken in front of Big Ben tower
General view taken in front of Big Ben tower   (Getty Images (by Event))
An example of British housing.
An example of British housing.   (KRT Photos)
A sign stands in front of a new home sits unsold on the market in southeast Denver on Tuesday, Oct. 16, 2007. Problems in the housing industry intensified last month with construction of new homes plunging to the lowest level in 14 years. Consumer prices, meanwhile, rose at the fastest...
A sign stands in front of a new home sits unsold on the market in southeast Denver on Tuesday, Oct. 16, 2007. Problems in the housing industry intensified last month with construction of new homes plunging...   (Associated Press)
The Great Westminster Clock.
The Great Westminster Clock.   (Getty Images)
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