Master Program Applied Economics at the Faculty of Economics and Statistics of the University of Innsbruck

Some observations need to be made regarding the FSA findings. The average price of homes in the U.K. from £ 137,273 in Q2 2002 to £179,170 in Q2 2012 reflects a nominal price development. If one corrects these prices on basis of U.K inflation levels over this period, than the conclusion is that over this decade nothing extraordinary has happened: house prices have just kept up with U.K. inflation levels and nothing more than that. Of course the period of 2002-2007 showed rapid value changes, but the correction has taken place over the period 2007-2012. A study based on...