In the last housing boom and bust house prices peaked ato £62,782 in the third quarter of 1989, they then dropped to £50,128 in Q3 of 1993. That was a fall of £12,654 or 20.2%. Prices then took another 2 years before starting to increase.
However, in the early 1990s, the inflation rate was much higher. Therefore, there was a much bigger fall in the real house prices. In real terms, the prices fell by 37.4% from a peak in the second quarter of 1989 to the trough in the last quarter of 1995.
So far, in this housing bust house prices have fallen 14.6% and are forecast to have fallen 16% by the end of the year.
The other big difference between the last boom is that interest rates are significantly lower in this crash. Home repossession rates in 2008, have not yet reached the rate of the last crash.
However, the level of transactions in this crash is even lower than in the early 1990s. This is due to the credit crunch and the difficulty of getting mortgages.
The Royal Institution of chartered surveyors suggested that Rentable incomes have fallen for first time since 2003.
Buy to Let landlords have the highest repossession rate.
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