Britain is facing a property price crash – and the return of negative equity.
The warnings come from Paul Cheshire, a former government housing adviser and professor of economic geography at the London School of Economics.
He said: “We are due a significant correction in house prices. I think we are beginning to see signs that the correction may be starting.
“Historically, trends seem always to start in London and then move out across the rest of the country.
“In the capital, you are already seeing house prices rising less rapidly than in other parts of Britain.”
He said that falls in real incomes – where wages do not keep up with inflation – are likely to be a factor.
The Council of Mortgage Lenders recently said the housing market has stalled; but most house price measures, including the latest from Nationwide, show residential property prices going up, bolstered by shortage of stock.