How UK House Prices Could Fall by 30% - BLOOMBERG
In a conversation earlier this month, senior reporter John Stepek made a prediction: House prices in the UK will continue to fall—and fall. On this week’s episode of In the City, he joins David Merritt to give his reasoning. Stepek explains that it’s not about housing supply. Instead, rising interest rates and stubbornly high inflation are combining to push home prices ever downward. Citing historical precedent, he warned that a 30% drop in real terms from peak to trough isn’t out of the question.
But that’s not the worst of it. When it comes to the most critical factor underlying the health of the UK economy, there’s a bigger threat than falling house prices, said senior reporter Philip Aldrick. It’s unemployment.
“What will define whether the housing crisis transforms into an absolute economic crisis is whether it’s combined with an unemployment shock,” Aldrick says. The reporters also discuss their expectations for consumer spending, real wages, and the Tory government’s chance of dodging a general election in 2023.