It's started! UK house prices collapse 12.5% with 'far worse' to come

By Richard Jeffries  GB News 

Published: 15/07/2023 - 17:51 Updated: 15/07/2023 - 18:06

House prices in Britain have already fallen by 12.5% in real terms PA

By Richard Jeffries 

Published: 15/07/2023 - 17:51 Updated: 15/07/2023 - 18:06

Real-terms drop could be even worse than 2008, warns leading expert

House prices in the UK have already dropped by 12.5 per cent in real-terms with a lot more to come, a leading property expert has warned.

The housing market is being hit by surging mortgage costs, with average two-year fixes jumping to a 15-year high of 6.7% as interest rates keep rising to combat stubbornly high inflation.

Halifax recently said house prices fell at their fastest annual rate in 12 years last month, down 2.6% at £285,932.

And now Rob Dix from the Property Hub has warned that, when you take inflation into account, a major crash He said: "Most people have missed it but we're actually already into one of the most significant price drops in decades.

"From 2020 house prices went almost vertical, growing 20 per cent or more a year.

"What goes up quickly tends to come down quickly too, but we've only seen a total fall in nominal house prices of 4-5% so far.

"That's why it looks like this is just the start and there's another 10 or 15% to come - or maybe even more given we were already at all-time highs going into 2020.

"I'm not saying there aren't further falls to come, there almost certainly are. But house prices have actually already fallen by far more than 5%. That's because we're measuring it with the wrong tool "

The bestselling author added: "The pound itself is falling in value, because of inflation.

"When the price of everything - food, fuel, house prices - has gone up and isn't coming back down, that's the same as saying the value of the pound has fallen.

"If we correct for this and hold the value of the pound constant - by looking at things in real-terms - we see a very different picture.

"In real-terms, property prices in the UK have already fallen by 12.5%, which means prices are actually back to where they were in 2014.

"People pay their mortgages with their salaries and investors are looking at the returns they make based on rents.

"So if wages, rents and everything else are higher - because of the pound losing value - and property prices are staying the same, they're actually falling.