Student landlords worried about house prices crashing should stop doing so because they will need to plummet by 19.3% just to fall back to pre-pandemic levels, research reveals.
That's according to the House Buyer Bureau, which says the contraction would need to be higher than the 12.9% drop seen during the global financial crisis of 2008/09.
Despite prices cooling, the research suggests that there is no imminent crash on the horizon.
The firm says that the current average UK house price is £287,546, while the pre-pandemic price was £231,940.
It says that one reason for the price surge is down to the Stamp Duty holiday implemented during the lockdown.
'Prophesise the demise of the UK property market'
Chris Hodgkinson, the managing director of House Buyer Bureau, said: "Many so-called property experts have been quick to prophesise the demise of the UK property market with fear mongering mutterings of a market crash.
"This simply hasn't been the case and house prices would need to fall by nearly 20% just to return to their pre-pandemic norm, let alone for the market to crash.
"The housing market is standing strong, and this is great news, however, our previous research found that the average buyer now needs almost nine times their annual income to cover the average cost of a home."
He adds: "When you combine this huge affordability barrier with a cautious buyer mindset following a string of interest rate hikes, the challenge today is the ability to find a genuine buyer in a proceedable position, not the price they are willing to pay when you do."
The 2008/09 global financial crisis
House Buyer Bureau points out that the potential price drop is even more substantial than the one experienced during the 2008/09 global financial crisis when average UK house prices were £183,148.
In just 14 months, prices had fallen by 12.9% to an average of £159,561.
The firm emphasises that current conditions would require a more profound period of economic turmoil to match the price falls witnessed in the aftermath of the global financial crisis.
Mr Hodgkinson said: "With property values showing little sign of reducing, this issue is one that is likely to persist and so sellers need to approach with pragmatism and avoid overvaluing, while buyers must be prepared to negotiate tenaciously to ensure they don’t overstretch financially."
Issue of falling house prices
Media outlets have also looked at the issue of falling house prices and The Times this week says that house prices will not crash.
The newspaper points to demand outstripping supply and mortgage rates also now starting to fall, which means buyers are returning to the market.
And the Telegraph says that with interest rates likely to top out at 5.5%, and inflation falling, will help the housing market avoid a crash.
The newspaper highlights that the last two price crashes coincided with recessions and falling consumer demand.
House price growth in the year
Robert Gardener, Nationwide's chief economist, revealed that house price growth in the year to July fell by 5.3%.
But, he said, a 'soft landing' is still achievable because the economic conditions will prevent a crash - he says that low unemployment rates will help.
Sarah Coles, the head of personal finance at Hargreaves Lansdown, says that affordability, especially for first time buyers, will be key in the coming months.
She says that in some parts of the country, mostly in the south, it is cheaper to rent a home than it is to buy.
'Stories of doom about house prices crashing'
Simon Thompson, the managing director of Accommodation for Students, said: "Stories of doom about house prices crashing will be making landlords nervous.
"Most people forget that during the pandemic house prices were rising quickly.
"And news that they would have to fall by 19.3% just to go back down to pre-pandemic levels should placate landlords."
