Is This a Crash or a Blip- The Recent Price Slump in the UK Housing Market

Many people are talking about the recent price slump in the UK housing market and for great reason. This gradual decline in the property market, combined with economic problems that both the UK and the US are having make many people fear the worst. Since the late 90’s/early 2000’s, many experts have been predicting a crash and some thing it’s here already. But is this really a crash or just a blip on the meter in the wide scheme of things?

We can compare this also to the price crash in the 1980’s. Many so-called experts in the field have been predicted this crash to be worse than the one of the 80’s but is this really the case? Do we have enough solid evidence to believe this to be true?

With a dropping market, many home owners are looking to auctions as an option to quickly sell houses that aren’t selling on the traditional estate agency route. Many investors are jumping on these opportunities for a great property at bargain rates and hoping to be able to use it to their advantage.

However, even through the auction route, homes aren’t selling for as much as they did and there is no longer a 97% certainty of selling a home through auction as there once was.

Here is a chart from MarketOracle.co.uk which shows the change in UK house prices over the past few years:

This shows a climb in prices and other statistics will show a decrease in sales. However, even when the prices are dropped, it shows no significance in the increase of home sales. Basically this tells us that the rate of sales is dropping.

Further studies show continual drop in house sales which many people think is a crash or the start of a crash but statistics still show that this slump is not as serious as the crash of the 80s and in comparison, these dips in the market are not enough to compare them to the crash of the 80s as equal.

Credit crunching in the banking sectors is making it more difficult for many people to get home loans. This means it is a great time if you are buying with cash and it’s also a great time to buy to let.

In conclusion, expert studies agree that the UK housing market will continue to decline by at least 15% during the next 2 years but even if this prediction is true, it will still not be as bad as the crash of the 80s and things are expected to even out and become steady again in the coming years after that.

Investors need to look at this as a blip in the market, not a total crash and remember that this “blip” can be a great investing opportunity. Buy in now while things are low and easily available and reap the benefits later when the economy and the housing market.

What are some things you can do as a home owner? First, act quickly if you want to sell your home for the first time. If not, you will need to hold onto it until the blip is passed. If you have cash, there are proper ways you can invest it while the market is at a low such as in Fixed Issued Bonds kept my strong large banks. Avoid investing in unstable mortgage banks.

Additionally, you can invest in government bonds and government certificates and take advantage of a stock market crash as a buying opportunity. While many may be falling into the gloom and doom belief that this so-called crash will rival the crash of the 80s, we prefer to look at it as just a blip that we will soon recover from.

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