Just what would finally bring the seemingly endless boom in house prices to a halt? A global banking crisis which resulted in the collapse of several large institutions plus others having to be bailed out by the government? A pandemic which cost the lives of over 100,000 people in Britain, led to the enforced closure of most shops and contracted the UK economy by nearly 20 per cent in a year?
Had you raised either scenario when the market was racing ahead in the mid-2000s there would have been a general assumption that yes, either would have been fatal, leading to a house price crash. Sure enough, the first of these – the 2008/09 banking crisis – did lead to a sharp fall in prices, albeit one which was rapidly reversed in London and the South East. But the second? The idea that a pandemic can have sparked a housing boom would have seemed absolutely mad.
That is to forget, however, what has really been driving the housing market for the past three decades: cheap money.
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