Two leading economists have predicted house prices tanking by nearly 40% – which would represent the worst house price crash since the early 1990s.
Paul Cheshire, professor of economic geography at the London School of Economics, told the Mail on Sunday the gap between wages and inflation coupled with a Brexit-sparked recession could leave homeowners in negative equity.
Cheshire said: “We are due a significant correction in house prices. I think we are beginning to see signs that correction may be starting.
“Historically, trends seem always to start in London and then move out across the rest of the country. In the capital, you are already seeing house prices rising less rapidly than in other parts of Britain.”
Fellow LSE professor Christian Hilber said: “If Brexit leads to a recession and/or sluggish growth for extended periods, then an extended and severe downturn is more likely than a short-lived and mild one.”
Inflation hit 2.9% last month while incomes grew by 2.1%.