House prices - risk to economy

House price rises continue to outstrip real income growth.  This is a danger to the UK economy according to BoE Deputy Governor Jon Cunliffe.

The response from the BoE was to instigate restrictions on lenders so that they can only lend up to 4.5 times a buyers income.

The latest Nationwide graph shows how despite the down turn and a big initial fall the ratio has started to rise again and remains stubbornly above the long-term average of just over 4.  Can house prices resist gravity for ever?

Landlord mortgages - finance my investment