Britain's property prices areskyrocketingbut household earnings and savings can't keep up.Couple this with the amount of debt Britons are taking on andit looks like the UK's property market is heading for a crash.Why'Because getting a mortgage is possibly the most debt you'll take on in one go and rates can't stay low forever. Eventually they'll rise and so will monthly payments.If household wages fail to keep paceas payments rise, they'll be stretched further and further.The average price to buy a house in Britain now stands at 291,504, according to the Office for National Statistics. Meanwhile, the average London property price is at a huge 551,00o.Analysts say that the fundamental supply and demand balanced is so skewed that the only direction houses will go is up.Research from the Royal Institution of Chartered Surveyors, estate agent Savills, the Council of Mortgage Lenders, and bank analysts has said prices will continue to rise over the next five years. Even a study published by Santander showed average house prices across the country will more than double to around 500,000 over the next 15 years.Technically, this should be correct. There is way too many people looking to buy a home and way too little to go around.But there are three key charts from the latest note from Citi FX's strategy note entitled "UK's increasing dependence and increasing vulnerability" which demonstrate how household finances can be considered being at breaking point.And if rates do rise soon then more people will fall behind with payments which will trigger a real-estate fire sale and increasing defaults.Britons' household savings are "deteriorating," says CitiFX.Britain is approaching a new long-term decline in savings. The Office for National Statistics, which CitiFX cites, says that savings will continue to fall over the next five years.This means Britons have very little in terms of a buffer zone should a rise in interest rates make their debt more expensive to service.This chart shows how the ratio ofproperty prices toincomeisrising.The most worrying trend is that the ratio is near the levels seen in 2007which was when the housing market crashed.Itshows house prices rising but earnings aren't keeping up. This means that people are taking on bigger mortgages leveraged that are more than four times their salaries.This "Unsecured loans to individuals vs. savings rate" chart shows that unsecured lending to individuals accelerating and has hit the highest level since 2005.Unsecured lendingis basically debt that isnot secured against a property. So this means people are taking on more debt in the form of loans and credit cards. Again, if rates were to rise, servicing that debt on top of a mortgage could prove a tipping point for some.See the rest of the story at Business Insider
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