Housing market safe from financial meltdown

Ryan Bembridge

January 18, 2016

Housing demand won’t fall even in the case of financial meltdown in 2016, Clayton Euro Risk’s chief executive Tony Ward has reassured brokers.

Last week Royal Bank of Scotland economics warned of a “cataclysmic 2016” – and while Ward reckoned they have a point he felt they may be overreacting.

The new year has seen falling oil prices, a stock market crash in China, shrinking world trade, rising debt and deflation.

Ward said: “RBS has a point but it is expressing a downbeat view.

“Markets have a habit of overreacting and this return to the new year has gone from benign to volatility to extreme nervousness. People have to hold their nerve but it’s going to be a bumpy year.”

He added: “Amongst all the carnage if you are a global investor the UK is the best place to put your money which is why we can’t see house prices collapsing.

“I don’t think we’ve got an asset house price bubble that is going to burst any time soon.”

John Charcol managing director Simon Knight and Aldermore group managing director, mortgages, Charles Haresnape, revealed they are both confident regarding the state of the UK market.

Knight said: “I thought RBS’s comments were very doom and gloom.

“There are a lot of moving parts at the moment but it feels very bearish to say there’s going to be global asset price depreciation.

“We are confident of the housing market in the UK and that is one of the reasons we bought [Southampton-based mortgage broker] Simply Finance.”

Haresnape added: “Can I see a crash? No I can’t.

“There could be some corrections during the year but when you look at the full year we expect a balanced market.”

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