06/07/2022
Could the property market crash like it did in 2008?
“If we look at what has been going on – house price growth, retail inflation, energy costs surging, that’s going to put pressure on employers to raise wages. I believe wages will rise, meaning real spending power will not actually decrease.
“If you borrow a hundred thousand pounds today, the fixed figure of one hundred thousand pounds doesn’t rise in line with inflation.
“So, in five years time that debt is probably worth half what it is today. In high inflationary times with relatively low-interest rates, it makes sense to borrow.
“The debt is being eroded by inflation, whereas the value of the asset (the house) is actually going up in line or ahead of inflation. It’s a way to make real returns.”
PROSPECTIVE buyers are waiting for house prices to finally fall, but as the World Bank warns of recession, could the property market crash like it did in 2008?