It’s a small world, small island edition

Watch the British housing market, says Howard Archer, chief UK economist at Global Insight in the Guardian:

“The overall impression we get from the very latest data and survey evidence is that the housing market has peaked and is gradually and erratically coming off the boil.”

Mr Archer added that prices were unlikely to slow sharply, but he cautioned: “There is a danger that tighter credit and sustained financial market turmoil will hurt the mortgage and housing markets in the UK.

“This increases the risk that the UK housing market could see a sharp slowdown, and subprime mortgage problems could become more apparent.”

Another interesting tidbit from the Financial Times:

Defaults on UK subprime mortgages have been far lower than in the US but the level is rising. Last week the Council of Mortgage Lenders said that home repossessions had jumped 30 per cent year-on-year.

The Council estimates that subprime mortgages make up 8% of the UK mortgage market, vs. 20% in the US. However:

U.K. consumers are the most indebted in the Group of Seven nations, according to data from the National Institute for Economic and Social Research in London. The ratio of household debt to personal income is 1.62, compared with 1.42 in the U.S., 1.36 in Japan and 1.09 percent in Germany.

Housing price inflation in Britain continues, with annual growth in house prices ranging from 7.6% in Wales to 55.9% in Northern Ireland. Annualized CPI was 1.9% in July, according to the Economist.