“1-in-10″ chance of 1990s UK housing crash - RICS

There is a “one-in-10 chance” of a 1990s-style UK housing market crash, the Royal Institution of Chartered Surveyors (RICS) said on Tuesday, after scaling back its expectations for British house price inflation.

William Kemble-Diaz and Sinead Cruise - LONDON, Sept 18 (Reuters)

Simon Rubinsohn, RICS’s chief economist, said his base case was for flat house prices across Britain in the next 12 to 15 months, down from an earlier forecast of 3 percent growth.

He also said there was a “20 percent chance of a 10 percent” decline in London house prices over the next 12 months, and said talk of a looming “crash” was legitimate and not irresponsible.

But like other housing market experts he said homeowners were unlikely to see a repeat of Britain’s previous housing slump, when average prices fell by an inflation-adjusted 35 percent from their peak in 1989, according to data from property services firm CB Richard Ellis.

Peter Damesick, head of UK property research at CB Richard Ellis, said the chances of a housing market crash were still “pretty small” because there was no obvious trigger in the offing such as the economic downturn or sharp interest rate hikes seen in the early 1990s - full article.