The risk of a house price crash is 'real and growing' – but is it such a bad thing?
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Loading... - Joshua Campbell
- 27 Oct 2022
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Just days ago Simon French, chief economist at Panmure, predicted that average house prices will fall 14 percent over the next three years, which is a 29 percent slump in real terms.
“This would take the inflation-adjusted average price for UK houses back to a level last seen in the first quarter of 2013 before the Help to Buy programme was instigated,” he said.
“The UK housing market faces up to its biggest challenge since the global financial crisis and arguably, given that the huge monetary easing that took place during that period is unlikely to be repeated, the coming years look more similar to the challenges of the early 1990s.”
But there’s another question which many are quietly beginning to ask as warnings like this grow. And it’s this…
Is the risk of a property crash really such a bad thing?
It’s a question we need to take really, really seriously.
Around 14 million people in the UK currently own a home. They’re the lucky ones, even if spiralling gas and electricity prices and unpredictable mortgage rates mean a home can sometimes feel like a weight around your neck.
But those who can’t afford to get on the ladder, or are unable to find a house due to the supply crisis we have right now, are quietly hoping for the worst.
They might not say it, but they will be rooting for a full-scale economic meltdown that would push prices back down to affordable levels.
Many of those hoping for this, point to what happened during Covid. They rightly point out how it led to an inflation in house prices that was not just unprecedented, but which created house prices that were simply unsustainable. Read More…
