Economy: Analyst debunks housing boom

A leading housing analyst yesterday claimed that the housing market was weaker than most people believed. Simon Briscoe, of the Japanese bank Nikko Europe, said a number of factors would keep the market subdued and meant interest rates did not need to be raised to calm the latest "market flurry". Mr Briscoe said the last rate rise in October helped remove the most attractive mortgage deals, and added that media hype had given a misleading impression of the strength of the recovery.

"The pressures that have led to healthy house price rises for London- based commentators are clear, but these are 'local area' not nationwide, pressures," he said. The growth rate of 8 per cent seen last year was one-third of the rate of growth in the peak year of 1988. He said increased job insecurity and other future worries would depress buyers' enthusiasm, but another slump on the scale of the Eighties crash was unlikely. "The combination of a densely packed and growing population and limited land availability will keep all but the most undesirable properties well bid," he said.