What house price crash? In London prices are at or higher than they were in 2007. I was patiently waiting for the house price crash, and in 2008 and 2009 I thought my patience would be rewarded. But it didn't turn out that way. Prices in the London areas I was interested in moderated slightly, however the stock of housing available declined significantly meaning there were few good buying options. Now that prices seem to have returned to 2007 levels theres a big increase in stock, and transaction do appear to be happening at those prices. Meanwhile mortgage interest rates for FTB's barely changed as dramatic reductions in base rates were just offset by rises in product margins. Deposit requirements also shot up to 25%, reducing the ability to fund purchases. So overall prices didn't actually move that much, the cost of funds for new entrants got worse, and the great opportunity to get in at a decent price failed to appear. Contrast this with the "irresponsible" people who bought over-priced homes they could barely afford with low deposits on interest-only tracker mortgages, they've been sitting pretty paying Base + 50bps. They're in a great scenario paying deeply subsidised mortgage rates and will benefit from getting the value of their huge mortgages steadily corroded via inflation. Meanwhile those of us with savings earning 2% interest will be slowly bled as 5%+ inflation from negative real interest rates and money printing eats away at the value of those deposits. You've got to ask yourself who the loser here is (i.e. seems to be me)? Successive governments seem intent on keeping the system of inflated property prices. Because retail housing is not "mark-to-market" in the same way that all other financial sector bets are, people will continue to pay the interest as long as they can when values fall because the only other option is a painful bankruptcy. If people had to collateralise their loans to maintain a maximum LTV thresholds then you would see large volumes of stock dumped on the market and prices coming down to clear at more realistic levels. As mark-to-market doesn't happen then only large income reductions will cause good volumes of stock to be dumped. As most borrowers are salaried, then this has to be either unemployment driven or induced by a payment-shock from rapidly rising rates. I only see two crash scenarios: - run away inflation and currency collapse forces the BoE to rapidly increase rates - spike in prolonged unemployment Personally I see the former as more likely than the later. Yes the new government is going to start to cull the zero-productivity government jobs of the labour era, and this may hit regional areas with no real non-government jobs hard, but for London its unlikely to have as material an impact. So run away inflation is the best bet for a crash. I suspect the reality will be protracted inflation at medium rates, eroding real house prices back to a more sensible level, but without drastic nominal falls. So that would suggest investing in inflation proof assets and waiting for the next 10 years. Unfortunately we don't have infinite life-spans, and for better or worse most people want to own their own place, so I don't see large proportions of the market taking the long-term view on this. This too will help support or further increase prices. Despite all reasonable sense, there is no house price crash!