HOUSES are 14 per cent over priced in the South East, says economists Pricewaterhouse Cooper.
They are more over-valued in the region than anywhere else in the UK except for London.
The South East figure is dwarfed by London's which stands at 31 per cent.
The figures reflect the differences in housing availability across the regions.
The study suggests that UK house price inflation, which has remained high so far this year, is likely to slow significantly over the next two years.
The company believes that a prolonged period of slow, or even house price reduction may be needed to restore house prices to a level with incomes.
Mr John Minards, partner at PricewaterhouseCooper, St Albans, said: "Recent rates house price inflation are unsustainable except in the very short term.
"We expect a significant moderation in growth that will gradually restore house price to income ratios.
"But given that affordability is most pressing in the south where supply constraints are most acute, we would be cautious about predicting a significant decline in UK house prices of the kind that occurred in the early 1990's."
July 4, 2002 13:30
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