Some 70,000 houses may have to be built each year to slow down escalating prices
The British government's plan to build more housing is a sign the country's property market has peaked, but a crash such as Hong Kong experienced in 1997 will not follow the contruction of more homes, according to analysts.
The British government has welcomed the Kate Barker Review, published earlier this month, which found that housing supply must be increased to stabilise the country's runaway sales market.
The report was commissioned last year by Chancellor of the Exchequer Gordon Brown, who was concerned that rapid rises in housing prices would damage the country's economy.
The review found that Britain had experienced a long-term upward trend in real house prices of 2.4 per cent annually over the past 30 years, which had created affordability problems.
Moreover, housing market volatility exacerbated economic instability. A lower trend in house price inflation was needed, Ms Barker argued.
