Will there be a house price crash? | The Sun

Will there be a house price crash? | The Sun

HOUSE prices have remained high in recent months – but will it stay sky-high over the next few months?

Property prices have soared in recent years, but there are fears that the property market is due a dip, which could devastate household finances.

According to the ONS, UK average house prices soared by 12.8% over the past year to an eye-watering £283,000.

There are a number of factors driving that growth. A stamp duty holiday during Covid spurred a number of people to move house.

And lack of housing supply means buyers are having to fight each other to get a property.

Agents are reporting buyers putting offers in for tens of thousands more than the asking price as they clamour to get a foot on the housing ladder.

Read more in property

I’m a property expert and these are the four questions ALL homebuyers are asking

Property on ‘upmarket estate’ could be yours for just £3k but there’s a catch

And while sceptics point to rising interest rates, which could push up mortgage repayments, others argue that rates are still very low compared to history.

Will there be a house price crash?

The last time property prices crashed was in the global financial crisis.

UK house prices reached an average of £190,032 in September 2007 and had plummeted to £154,417 by February 2009 – a fall of more than 18%.

They did not regain that peak until August 2014.

Scott Taylor-Barr, a financial expert at Carl Summers financial services, told The Sun: "The UK property market has been busy re-writing the economic rule book for a few years now.

Most read in Money


Thousands of parents could get free cash worth £500 – how to claim


Drivers warned about costly petrol pump mistake to avoid when filling up


The five locations where benefits could be stopped in Universal Credit shake-up


British Airways tried to charge me £900 for simple flight change

"As all the financial indicators point to a downturn, the market seems to say “hold my beer” and promptly goes in the opposite direction."

He agrees that a lack of housing supply should mean prices keep rising: "Like gold, there's simply not enough of it."

What could cause a house price crash?

Although Charlotte Nixon, mortgage expert at Quilter told The Sun that data now shows the pace of transactions has slowed down dramatically, there are plenty of reasons still that could cause a house prices crash.

Here are a couple:

Supply shortage

Rhys Schofield, managing director at Peak Mortgages and Protection, agreed the UK's chronic housing shortage will put a floor under prices.

"We live a country where there are fewer houses than people willing to buy or rent.

"We're even worse at building enough houses to keep up with new demand, let alone tackle the backlog. And this means house prices can only continue to go in one direction over the long-term."

Mortgage lenders

One concern Taylor-Barr does have is whether mortgage lenders will tighten up and get stricter on approving loans.

He said: "If lenders are concerned about the cost of living and interest rates, they may choose to protect themselves by placing some limitations on their lending.

"That could see house prices affected; but there’s a lot of ifs, buts and maybes in there. Only time will tell."

Read More on The Sun

Couple’s horror as winning lottery ticket SHREDDED by their pet dogs

Seven benefits worth up to £689 you can claim with a mental health condition

Our mortgage payment calculator can help you work out how much you can afford to borrow to buy a home.

And our My First Home series reveals each week how first-time buyers have got a foot on the ladder – like the two best friends who teamed up to buy a £505,000 first home.

    Source: Read Full Article