City Of London

How UK House Prices Could Fall by 30%

If history is a guide, it could really get that bad. Add in an unemployment shock, and the British economy may be in big trouble next year.

A pedestrian looks in the window of an estate agent in the Mossley Hill area of Liverpool, UK.Photographer: Mary Turner/Bloomberg
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In a conversation earlier this month, senior reporter John Stepek made a prediction: House prices in the UK will continue to fall—and fall. On this week’s episode of In the City, he joins David Merritt to give his reasoning. Stepek explains that it’s not about housing supply. Instead, rising interest rates and stubbornly high inflation are combining to push home prices ever downward. Citing historical precedent, he warned that a 30% drop in real terms from peak to trough isn’t out of the question.