Last House Price Crash

Here’s a graph to show what happened in the last house price crash. Many will remember the boom years of the 80’s with yuppies and their huge mobile phones, then the desolation of the 90’s with negative equity, record high interest rates and high unemployment.

If you look at the graph you will see that from peak to trough we are only talking about a nominal 13% fall. However, if you take into account inflation then the fall is much larger. Some economists are predicting a 40% correction or more this time around, but even if you look at a conservative prediction of 20% then you can work out for yourself what the effect will be on the UK economy.

The difference this time round unfortunately is that we all have so much more debt which will mean that this will affect us all and the house price crash along with the economic fallout will be even worse than the crash of the early 90’s.

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Source: Halifax Seasonally adjusted – AllMon(SA)