To those predicting a prolonged, big fall in house prices. Some thoughts for you. Historically you need two key ingredients for major falls in UK prices. The first is unemployment rates over 10%. The second is high interest rates.

The logic being that if unemployment is high, people don’t have the money to pay mortgages. And if interest rates are high, replacement jobs might not pay enough to service mortgage payments

If you analyse the position we are in, in 2020. Pre-crisis the country was essentially at “full employment” with an unemployment rate of under 4%. Whilst there has been a massive spike in jobless claims, with the government furlough scheme...

It is hard to see the 10% unemployment barrier being broken but it is possible albeit only temporarily. As for interest rates, well they are at 0.1% and the only way they go up is if we have rampant inflation, which seems unlikely for now.

Whilst these conditions will be uncomfortable for many property owners, very few will be forced to sell. Firstly because interest payments will be manageable, second UK mortgaged property is largely at fairly low LTV thanks to GFC and third government will put...

Pressure on banks to give distressed homeowners time to sort their affairs post-crisis.

As was witnessed post 2008, such conditions result in a stand-off between buyers and sellers. But as the sellers are generally not forced to sell, the buyers usually end their strike as “inertia fatigue” sets in. A lack of supply of property then drives prices up

This doesn’t mean there won’t be bargains to be had. Or that if you are in a forced sale position right now that you won’t see a 20% short term drop in value. However, this will be exceptionally short lived. If you don’t have to sell in the next 3-6 months. Sit tight

If you find yourself under pressure to sell, try to find a way around doing that.