Here comes the house price crash

Most people are still in denial about the UK property market. But prices are set to crash - and that could crush the whole UK economy. James Ferguson looks at why it's time to prepare for recession - and picks the best stocks to buy in a downturn.

I'll get straight to the point. The UK housing market is going to crash and it may well drag the UK economy into recession as it does so. The signs are all there the house-price indices are turning down. Halifax has just reported the biggest three-month price fall since 1995, while negative analyst reports are becoming more common HSBC reckons prices are 30% overvalued, while David Miles of Morgan Stanley recently said he expects prices to fall by 10% next year.

Yet most people are still in denial and hoping for a soft landing. TV's Phil Spencer, of Location, Location, Location fame, sums up the general mood. He maintains the long-term "fundamentals" are good since "unemployment looks set to remain low, earnings are rising, the population continues to grow and there is a shortage of housing". Unfortunately for Phil, each of his points is at best irrelevant and at worst, downright wrong.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

James Ferguson qualified with an MA (Hons) in economics from Edinburgh University in 1985. For the last 21 years he has had a high-powered career in institutional stock broking, specialising in equities, working for Nomura, Robert Fleming, SBC Warburg, Dresdner Kleinwort Wasserstein and Mitsubishi Securities.