What would it take for house prices to crash?

Just what would it take to induce a housing price crash in Britain? Evidently, more than a Bank of England base rate of 4.25 per cent combined with a cost of living crisis. 

The Office for National Statistics’ House Price Index – the most comprehensive of the house pries indices – shows that prices fell in February by 0.3 per cent. That includes all transactions and is based on actual sales prices rather than mortgage approvals.

Yet over the past 12 months, prices are still up 5.5 per cent. Given anecdotal evidence of landlords selling up in response to rising mortgage rates, changes to the taxation of buy-to-lets and new rules demanding the upgrade of all rental properties meet a grade C rating on an Energy Performance Certificate by 2028, it is truly remarkable. Not only that, but the end of the Help-to-Buy scheme has removed incentives for first time buyers. 

There is no indication, so far, of anything to match the housing slump of 2008-09, when prices plunged 15 per cent in a single year – a slump which itself was rapidly reversed in London and the south-east.