The crash of the early 90s saw millions of UK households plunged into negative equity, owing more on their mortgage than their properties were worth.
If Professor Cheshire is right, the average property in Telford would fall in value by £62,773, down from £156,993 to £94,220. The average property in Shropshire, meanwhile, would lose more than £80,000 of its value, falling from £201,833 to £121,100.
Stuart Farquhar, a senior lecturer in economics at Wolverhampton University, says he is not surprised by this forecast and warned that three major factors coming together which could signal a significant looming fall in house prices; high rates of personal indebtedness, low consumer confidence and rising inflation.
He said; “The fact that consumer debt is still at a level that is not much different from before the financial crash means it is no surprise that people are predicting a big fall.
“Consumer confidence is also down, and then there is the rise in inflation which has been caused by the fall in the exchange rate.
“Consumer confidence is about where we would expect it to be in the event of Brexit, and attempts to replace that with an increase in exports has not happened.”
Commenting on his prediction of falling house prices, Professor Cheshire warned that it may already be underway; “We are due a significant correction in house prices. I think we are beginning to see signs that correction may be starting.
“Historically, trends seem always to start in London and then move out across the rest of the country. In the capital, you are already seeing house prices rising less rapidly than in other parts of Britain.”
If you’re a homeowner worried about falling house prices or negative equity, contact us for a consultation on 0161 631 2727 or online at negativeequityuk.com