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That on its own is going to kill most of the market, when average earnings are around £21kpa.

Anyone with a £100k deposit and earning enough to afford a £200k mortgage isn't going to want to live in an area where they can afford a £300k family home.

Really what's happening is that buy-to-let is keeping prices artificially inflated. People with no choice keep renting, the owners keep cashing in.

But if rates rise the numbers won't add up, and it's unlikely rents can rise much further.

If there's a mass exodus from b2l, or mass repossessions, prices will fall by up to 30% best case.

Worst case will be Ireland 2.0.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 1st, 2011 at 10:05:05 AM EST
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