Some experts expecting house price crash
October 17, 2007
According to recent reports a number of experts in the UK are expecting a house price crash over the coming months, with some stating that the situation could be similar to – although not as severe as – the crash that was seen in the UK in the 1990s.
A number of officials at the Royal Institute of Chartered Surveyors are expecting house prices to fall in the coming months, and expectations have been lowered by the institute to reflect this.
Officials at the Royal Institute of Chartered Surveyors have denied claims that the predictions are irresponsible, and state that they are in fact legitimate predictions. They have stated that there is a 20% chance that house prices in London will fall by 10%.
Reports and data show that the house price crash in the 1990s saw house prices fall by 35% on average, and the fall in house prices is not predicted to be that severe. However, some industry professionals feel that the chances of a house price crash in the coming months is very unlikely.
In the event of a house prices crash many people that have recently taken out huge mortgages – particularly those that have taken out 100% mortgages – could quickly find themselves in negative equity. Those that are currently enjoying high equity levels in their homes could see the level of equity fall considerably.
In fact, the only ones to benefit would be first time buyers, who will be able to enjoy lower house prices, and those that have recently sold their homes and are renting for a short while before purchasing another, as they will have cashed in on their own equity whilst house prices are still high, but will get to enjoy reduced prices when buying another property.
Alan Wright
17th October 2007
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