There have been warnings in recent weeks that the UK housing market could be heading for a crash, now an analysis by online estate agent eMoov.co.uk is suggesting prices could fall to as low £70,000 in some parts of the UK.
According to the analysis, the biggest drop in value would be seen in the South East of England where prices could reach £253,327, down from £315,807 today, a devaluation of £62,480.
Northern Ireland, meanwhile, would see house prices reach the lowest level in the UK, down from more than £150,000 to £77,378, with properties at the lower end of the market falling even further. Northern Ireland is vulnerable in part because house prices there have never recovered from the last property crash, almost ten years ago.
London house prices could lose more than £85,000 in value in the event of a crash, falling to £395,753.
The research by eMoov used land registry data to look at the fall in property prices in each region of the UK between 2007, their pre-crash peak, and 2009, when prices started to appreciate again.
Using current average prices for each region, eMoov then calculated what an equivalent drop would mean for house values if there were to be a new housing market crash.
If these falls were to happen, eMoov are also predicting that it would take the market seven years and seven months to recover to current values.
Russel Quirk, founder and director of eMoov, said; “Although many in London and the more inflated markets will be outraged at the idea of a four to seven year setback where their property asset appreciation is concerned, they would do well to spare a thought for those in the North East and Northern Ireland, who are still enduring the legacy of the last market crash.
“What this research highlights is that, if you really do believe that what goes up must, at some point, come down, then you are far better off selling your home now, with a very slight depreciation of below 1%, than in the midst of a market crash with a potential deduction of around 19% on your property price, albeit a speculative crash at present.”
House price falls of this scale would be disastrous for homeowners, many of who would be plunged into negative equity, where the value of their property is less than the outstanding balance of their mortgage.
If you’re a homeowner concerned about negative equity on your property, contact Negative Equity UK for a consultation on 0161 631 2727 or online at negativeequityuk.com.