Sizeable number of adults in the UK think there will be a housing crash within five years

Although house price rises have slowed recently a sizable proportion of British people still believe that the property market is heading for a crash within the next five years.

A new survey asked people to say if, and when, they believed the UK housing market would experience a crash, and offered a range of timescales for respondents to choose from.

Just 4% of people thought there would be a housing crash in the next 12 months but 17% thought there could be in the next two years and 45% within five years, according to the research from property marketplace TheHouseShop.

The survey conducted by YouGov also shows that 60% believe there will be a price crash in the next 10 years, 65% within 15 years, 66% within 20 years and 67% in more than 20 years. Some 33% said they do not think there will be a crash in the future.

A regional breakdown of the survey results shows that people in London were most pessimistic about the future of the housing market in the short term, with 55% predicting a crash within five years.

The poll also shows a generational divide. Respondents in the 55 plus age group were far more confident in the stability of the market when compared to younger people. More than 40% of those aged 55 and over said there would not be a crash in future, compared to half that amount for respondents aged 25 to 34.

According to Nick Marr, co-founder of TheHouseShop, while an all-out crash is unlikely, there are still a few scenarios that could push the market over the edge, most notably the possibility of a tough post Brexit environment and interest rate rises.

‘It was great to see that confidence in the short-term stability of the housing market has improved slightly since last year, but it is still worrying to see that almost half of Brits believe there will be a crash in the next five years,’ he said.

‘In reality, the likelihood of an all-out crash seems relatively small at the moment. House price growth has slowed significantly in the past 12 months and it seems we are experiencing a more tempered market correction,’ he explained.

Marr believes that if interest rates rise to anything approaching the 5% mark there could be serious issues across both the sales and rental markets. ‘A lot of tenants probably don’t realise that their rent payments are pegged to their landlord’s mortgage repayments so a significant rates rise would effect not just mortgage holders, but renters too,’ he pointed out.

TheHouseShop commissioned an identical survey in July last year to gauge opinion on the future of the market one year after the Brexit vote. Comparisons between the July 2017 and March 2018 results show that public perception of market stability seems to have improved over the past nine months.

In July 2017 some 24% predicted a housing crash within the next two years compared to just 17% who said the same in March 2018. Similarly, the number of people who said there would not be a crash in future increased slightly from 28% in July 2017 to 33% in March 2018.

Older age groups showed the most improved confidence in the housing market, with an 11% increase in the number of 45 to 54 year olds who believe there will not be a crash in future, and a 5% increase for the 55 and over age group from 37% to 42%. People who own their home outright also showed improved confidence, with an increase from 33% in July 2017 to 41% in March 2018.