Majority of people in the UK expecting a house price crash
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House price crashes in the UK
Public confidence in the future performance of the UK housing market is faltering, according to a new survey published by thehouseshop.com.
More than half of British adults, 53%, who took part in the survey which was conducted by YouGov, said they believed there will be a crash in house prices in the next five years.
24% of respondents said they were expected a crash in the next two years, while 6% said they thought it could happen as soon as next year.
Meanwhile, only 28% of people who took part in the survey said they had confidence in the housing market and were not expecting a crash in house prices in the foreseeable future.
Confidence in the housing market was divided sharply along generational lines, with confidence lowest amongst younger adults. Three quarters of people aged 18-34 said they were expecting a house price crash to happen within the next ten years, and 58% saying it would happen within five years.
Nick Marr, co-founder of thehouseshop.com said that some of this pessimism about the future performance of the UK housing market may, in fact, be driven by a desire for house prices to fall.
He said; “I imagine that many young people are in fact hoping for a crash, so that they can snap up cheap properties during the low point of the resulting crisis and then enjoy the same appreciation of value that saw their parents accrue substantial personal wealth from property ownership.”
There are, however, signs that the UK housing market may be struggling.
Asking prices for homes in London suffered their greatest annual fall this decade and have dropped by more than £18,000 on average in just the month from August to September, the largest fall since December last year, according to data published by Rightmove.
Inside the Capital the average asking price for a home in Kensington and Chelsea plummeted by more than £300,000 between August and September, while Camden was also badly hit, with asking prices down by an average of 7%, or almost £75,000, compared to August.
Nationwide also recorded a fall in house prices nationally in August, as they dipped by 0.1%.
Falling house prices would raise concerns about homeowners finding themselves trapped in negative equity, where the outstanding mortgage is greater than the value of the property. Homeowners in negative equity could find themselves unable to move if they had to as they would be left having to pay the difference between the sale price of the house and the outstanding mortgage debt.
These concerns would be greatest in the North of England, where research has shown house prices have still not recovered in many areas following the last property crash.
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