There is a "significant probability" that house prices will fall at some stage, a member of the Bank of England's Monetary Policy Committee has warned.
Stephen Nickell said the ratio of house prices to earnings was now "well above" its average level over the past 20 years.
He said that in London house prices were now close to being six times average earnings.
It was "quite possible" house prices would not fall at all but they were likely to go down relative to people's earnings, with prices growing by less than 4.5 per cent a year.
Wednesday September 15, 2004
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