Is Britain headed for a housing market crash?

ended 11. November 2021

A journalist at the Daily Express is looking for property experts to answer the question: Is Britain headed for a housing market crash? Is there any evidence to suggest a crash could be coming? If so, when would the crash hit? What factors would make a housing market crash more likely?

Keep your responses to 2-3 sentences max!

9 responses from the Newspage community

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"If the Bank of England raises interest rates we may see a market crash. The impact of rate rises on sentiment and consumer finances could be dramatic."
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"We don't predict a crash in the housing market, but we do predict stabilisation of prices to pre-pandemic levels. Some areas of the UK have seen 10% rises in property values over the past year, and that is simply not sustainable in the long-term."
The housing market is still very strong, demand from buyers is high. Its possible that this is in part fuelled by historic low interest rates, with the base rate still at 0.1%. Banks are already pulling their lowest rate mortgages. In my opinion the biggest risk of a housing market crash, would be a steep increase in the base rate as a response to spiraling inflation.
I'm struggling too see any drivers of a house price crash in the current market: - Demand for property remains high, with more buyers than properties. - Record low interest rates with good mortgage lending availability. - BoE predicted rate rises, but small steps and spread over a long period - Employment remains buoyant with many sectors struggling to find staff Given the above it would seem difficult to predict a housing price crash. You would need a very large shift in one of those metrics to create a potential crash scenario; it is far more likely that we will see a period of very little house price growth, rather than a marked fall.
"All the indicators are suggesting the UK housing market remains strong, and it is most certainly a sellers' market at the moment as demand remains as strong as ever. The inevitable event of interest rates rising could dampen demand, with many buyers already stretching their budget to the max to simply be able to afford to get onto the housing ladder or purchase their next home as their family grows and requirements for more space increase. Whilst inflation continues to soar, and many experts predicting the inevitable rate rise to come sooner rather than later, fortunately the continuing rate war between banks will keep interest rates low and thus the demand for housing should remain as strong as ever."
Remember in March last year when the market was supposed to crash and it exploded?
You can always find someone who thinks the housing market's about to crash. It's an obsession for some people. Even a stopped clock is right twice a day, but I don't think there's any particular reason to be concerned right now. Okay, mortgage rates are starting to rise (form all time lows), but any increases to interest rates are likely to be gradual.
A crash is predicted by several factors coming together at the same time; rising inflation that leads to increased borrowing costs as central banks try to regulate the economy, over-inflated asset prices artificially pumped up by perhaps a tax break and low borrowing costs, rising unemployment and a contraction of the economy, brought on by supply chain issues, but mainly an inability to get credit. We can still get credit. So, as things stand, we're ok; however, if you are concerned about the possibility of a housing crash, it's maybe best to elect a government that acts in its citizen's interests rather than its internal failings.
I think it is very unlikely we will see a housing market crash. The value of properties have only been going one way since the pandemic, I don't expect to see this changing, especially at the higher level where we have seen an increased demand for Prime Properties.