CRASH PADS

House prices were expected to fall post-Brexit and post-pandemic, yet in both cases, they continued to climb – even the cleverest analysts don’t have a crystal ball. Simon Tollit, partner at estate agent Tedworth Property, notes that property prices in London fell substantially during the crash of the early 1990s, but they had also grown the most when the bubble inflated. The “scarcity of product” in prime central London means it is unlikely to be a microcosm of the situation across the country. “Not to be overly bullish – you’ve got to be cognisant there is a lot going on in the world and there may be a period where there is not as much demand,” he says. “But because supply has dwindled as well, it kind of counters it.” Arora thinks the middle and luxury areas of the market will remain resilient, but expects a downturn at the lower end as higher mortgage costs hit buyers on a budget. He says the stamp duty reduction may cancel out higher interest rates, before adding: “I don’t know what’s going to happen in 12 months when the base rate may go up to 4 or 5%. We’re still seeing active buyers and the only people that have pulled out are those that literally can’t afford it. “Investors are still there, especially international ones as the pound is weak, so personally I don’t think the market is going to tank as much as some people are predicting.” We should remember a house price correction isn’t bad for everyone. It gives more borrowers the chance to get on the property ladder, freeing up rental homes for those who can’t afford to buy. For most people, a property isn’t an investment, but somewhere to live.