Britain is now in the midst of the worst housing slide since the Great Depression, economists declared after house price inflation dropped to the lowest level since comparable records began.
Britain is now in the midst of the worst housing slide since the Great Depression
Halifax figures show house prices have fallen by 8.7pc in the year to June
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House prices have never fallen by more than 10pc over a year in recorded history, except in 1931, when Britain left the gold standard.
David Owen of Dresdner Kleinwort said: "Back then, sterling had been ejected from the gold standard and the currency collapsed, and, although this helped exports, house prices collapsed. What we are seeing now has some parallels with then.
"However, it is a very unreal situation because this is happening without there being a major recession, and we haven't seen distressed selling, nor a significant increase, yet, in unemployment."
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Alex Vitillo, of Fathom Consulting, said that the downturn was already more severe than the early 1990s, where, according to figures from Nationwide, prices dropped by around 20pc over a number of years.
He said: "As the UK housing market downturn gathers pace, it is common for analysts to argue that this downturn will not be as bad as the early 1990s vintage. It looks like it will be worse, perhaps far worse.
"The decline is far greater and swifter than anything we saw in the early 1990s. Our modelling work suggests that nominal house prices could fall by another 15pc to 20pc from here," he said, adding that there was a risk of even greater falls.
