Housing supply and demand issues mean a potential house price crash is ‘pie in the sky stuff’, according to Rhys Schofield, managing director at Derbyshire-based mortgage advisors Peak Money.
The past week has seen speculation that the market could face a correction of anything up to 30%.
This has drawn the ire of some brokers who have claimed that the media is stoking a potential crash pointing to the chronic under supply of housing in the UK as a reason for continued optimism.
Schofield said: “A house price crash is pie in the sky stuff. It sells papers but I think it’s out of touch with reality.
“Firstly, we still have an issue around supply and demand, which creates an inflationary pressure until, by some miracle, enough houses are built.
“Secondly, and the bit that always gets missed, if buyers don’t buy then what’s the alternative? Renting?
“Stock shortages in the rental market are even more acute, rents are insane and landlords are either putting up their rents or leaving the market.
“This only drives up the price of the alternative, further. I do think we will see a squeeze on the middle of the market where bigger mortgages become unaffordable and people sell up to buy something smaller but then that creates a price pressure on cheaper properties.
“There won’t be a crash, and 95% mortgages will still be available even if it takes some Government input. The UK is still a nation of people who aspire to homeownership.”
