How far will house prices fall?

‘Forecasting is a mug’s game’ is a truism attributed to everyone from fantasy author Douglas Adams to former Bank of England governor Mervyn King. It reminds us that commentators should never be smug when they call the near future right, or quick to crow at others who turned out to be wrong. I may have been a step or two ahead of the pack this season on inflation and recession risks and I’ve always said crypto, which we’ll come to in a moment, was the road to perdition. But I confess my record on property trends is frankly lamentable.

Way back in the ‘negative equity’ era of the mid-1990s, I said house prices would stay flat for the foreseeable future, bricks-and-mortar would cease to be essential family assets and Britain would transition to a German-style mass rental market. In April 2020, when the property market was suspended in the first lockdown, I predicted it would ‘reopen in the autumn with sales being agreed at, say, 15 to 20 per cent below pre-virus levels’ but that would at least be a boon for affordability.