House prices 'could drop dramatically'

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There is a one in ten chance that the UK will experience a 1990s-style housing market crash, an industry expert has warned.

Rics revealed that it expects house prices to remain flat over the coming 12 to 15 months but added that there was a chance that they could dramatically fall.

Chief economist Simon Rubinsohn explained that a house price drop of more than ten per cent was particularly likely in London.

During the last housing market crash average property prices slipped by 35 per cent from their peak in 1989.

However, recent reports have suggests that landlords could remain largely unaffected by a slowdown in the housing market.

In fact, Malcolm Harrison, spokesperson for Arla, said that a price drop would encourage more people to rent.

He explained: "Buy-to-let is quite predictable - in that if there is a slow-down in house prices you know there is going to be more rental demand, and that always means the case of a thriving rental sector."

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