After five quarters of a housing slump, British homes have lost around a fifth of their value. Some investors have pounced on small improvements in the statistics as a sign that the market is on the road to recovery. In fact, the evidence points to a worsening situation and it's likely that we're still a long way off the bottom and nowhere near a turning point. Dominic Picarda plots the course ahead and offers advice on the assets that are likely to do well as housing declines further.
The wrecker's ball is swinging around violently. Over the past 20 months, the real value of the average British home has crumbled by around one-fifth. Mortgage lending has collapsed, while the number of houses being repossessed is soaring. This demolition job is a disaster for millions of people who have put their faith – and savings – into residential real estate.
Despite the destruction, property's many cheerleaders remain hopeful. Any slight improvement in housing market statistics is seized upon as evidence that the worst is over. The lessons of history – that property crashes last for years and that false dawns are many – are being ignored. But our research tells us that house prices will continue to fall in the coming years. The worst is almost certainly yet to come.
