Industry rules out housing market crash

The majority of the industry believe there will be a soft landing to the housing market and not the crash that some have predicted.

Delegates at the Council of Mortgage Lenders’ annual conference today voted in favour of a soft landing.

This came after David Smith, economics editor of The Sunday Times, spoke for the motion of a soft landing and Roger Bootle, managing director of Capital Economics, spoke against this outcome.

Smith cited a stable economic environment as a main reason for his prediction and told delegates: “The main reasons we will see a soft landing are low inflation and interest rates, greater mortgage competition, record employment levels, rising demand alongside a limited supply and the return of the private landlord.

“People don’t cut prices unless they have to.”

Bootle told the audience that the economy in general may have a soft landing, but that the housing market would not.

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 and unemployment figures usually follow on from a slump – not the other way round.

“There will not be an armageddon, but the excessive boom of the last few years must be eradicated.”