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Average value could drop by £400 a week if 'bubble bursts'

The average property in the UK could decrease in value by up to £399 a week over 21 months, according to estate agent eMoov.

The firm says that if a survey of leading economists proves to be correct and the property bubble 'bursts' in 2017, then the average national property value could fall to as low as £180,000.

eMoov analysed the decline in values during the last ‘crash’ between the end of 2007 and the beginning of 2009, calculating a 16.7% fall in average values across a 21 month period.

Applying the same maths in 2017 would mean average prices would drop by over £36,000 over a 21 month period.

The research highlights that property owners in London would be the hardest hit if prices dropped at the same rate as between 2007 and 2009 (16.3%).

In this scenario the average owner in the capital would suffer from a loss of approximately £78,000 over 21 months.

Despite Londoners suffering the largest monetary loss, the capital didn’t see the largest percentage decreases during the last crash.

These were recorded in the South East, East, South West, East Midlands and the West Midlands. Average prices in these areas all dropped by over 16.4%, meaning homeowners experienced their property values decreasing by an average of between £24,000 and £42.

Similar price falls starting in 2017 would see the average house price in the South East reset to £258,000 and £146,000 in the East Midlands by 2019.

"Although the UK property market as a whole is faring very well, there are signs that the London market, particularly the prime central end, is running out of steam," says Russell Quirk, founder and chief executive of eMoov.

"Even so, it is unlikely that we will witness a market crash as monumental as the one we experienced a decade ago, so homeowners should rest assured that this research acts as a warning of what the worst case scenario might look like."

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    What bubble? I know emoov don't live in the real world but come on guys? What bubble?

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    I think they mean the one caused by years of prices getting massively out of synch with local wages, affordability, and how the factors for that anomaly are now leaving the market (speculation from overseas etc.), leading to a return to the long-term historic norm of the market needing first-time buyers to be able to get sales volumes moving again.

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