David Smith, economics editor of The Sunday Times, spoke for the motion of a soft landing and Roger Bootle, managing director of Capital Economics, offered an opposing view.
Smith told delegates: “Low inflation and interest rates, record employment levels, rising demand against a limited supply in the housing market and greater mortgage competition contribute to a stable economic environment and the reasons why I think there will be a soft landing.”
He also said that people do not cut prices unless they have to and while there have been slight adjustments of late, there was no sign of a crisis.
But economist and revered doommonger Bootle told the audience that the excessive boom of the past few years was not sustainable.
He told delegates: “There is always a bust after a boom and there will inevitably be a fall as the market is currently overvalued. Arrears were not an indicator before the last fall and are not a useful indicator. Unemployment figures usually follow on from a slump – not the other way around.”
Bootle also praised the buy-to-let sector, saying anything that offered more flexibility should be welcomed.
Delegates were asked to give their opinion on the market before and after the talks and voted in favour of a soft landing on both occasions although the number of votes fell from 88 to 72 out of 130.