UK Landlord Forum / Life

I was browsing through the housepricecrash forums and found an interesting thread:

"House Market Is Crashing In U K, If 20% down is a crash -- B T L "no longer feasible""
http://www.housepricecrash.co.uk/forum/index.php?showtopic=58138


One guy said this:

The Great House Price Crash of the early 1990s is widely held up as a warning of what is to follow. Well, I lived and invested through that time, and came out the other side, battered but still smiling, and I can tell you that, back then, we had high unemployment, low employment, and 15% interest rates. And house prices "crashed" for four consecutive years. Though, to be honest, the price change numbers for those four years don't really suggest a crash to me - minus 1.3%, minus 1.4%, minus 3.8% and minus 2.5%.

Today, we have low unemployment, high employment, and historically low interest rates (still) at around a third of what they were back then.

PLUS we have higher housing demand now - smaller families (the average number of people per household has fallen to 2.3, and is expected to be 2.1 in 20 years time), more single-occupant households, more single parents, people living longer, higher levels of immigration (particularly from Eastern Europe) and so on. All of which is pushing demand ever higher. On the supply side - well, no one here has apparently read the Barker Report, (remember facts? analysis?) which suggested we need to be building 220,000 new homes a year to cope with rising demand. In recent years, the number of new homes has risen from 130,000 to 180,000, which is still way lower than what is required.

So, when we have...

HIGH employment
LOW unemployment
LOW interest rates
HIGH demand
LOW supply

...can one of you budding economists out there please explain to me the basis for a house price crash?

I've wrote a similar article before, regarding the signs of a property crash and how they're not present at the moment. Obviously, the guy who wrote that comment got patronized and ridiculed to pieces for his beliefs on that particular forum.

Regardless, interesting thread