The first cracks in Britain’s personal debt laden economy were revealed today as debt solutions consultancy, Thomas Charles announced a widespread lack of faith in the stability of the UK housing market.

According to research published today, almost 1 in 4 (24%), or 11 million UK adults, expect property prices to crash within 18 months.

The research, conducted in conjunction with YouGov with 2,353 respondents, also revealed that almost 1 in 5 (19%), or around 9 million adults, expect a crash to come within 12 months, with 1 in 3 (29%), or 13.5 million adults, expecting a crash within 24 months.

Regionally, Londoners were found to be most concerned with 28% expecting a crash within 18 months while the South West remain cautiously optimistic at 18%.

Young adults, 18 – 29 were shown to have the least faith in the market, with 27% predicting a crash within 18 months, compared with 23% of 30 – 50 years olds and 21% of over 50s.

The research also revealed the recent rise in interest rates to 5% in November as a contributing factor to the predicted market slow down.

When asked ‘by how long do you think rising interest rates will delay your first step onto the property ladder’, 30% of non-home owners, or 4 million adults in the UK, reported some delay, with almost 1 in 5 (19%), equivalent to over 2.5 million UK adults, reporting a delay of 3 years or more – enough to have a significant impact on the housing market.

Regionally, the hitherto soaring London market was shown to have seen the greatest impact as a result of the November hikes. 35% of Londoners reported some delay in their house purchasing plans, followed closely by the West Midlands at 34%. Figures were lower in Scotland where 16% report a delay and a comparatively small 6% report a delay of at least 3 years.

Again, young adults, 18 – 29, were shown to be most affected by the hike with 44% reporting some delay in their first step onto the property ladder, compared with 29% of 30 – 50 year olds, and 5% of over 50s.

James Falla, Director of Thomas Charles, commented:

“The research shows that a high proportion of UK residents have lost their faith in the stability of the UK housing market. With interest rates rising and bad debt soaring, fewer and fewer people can afford to gamble with a mortgage. Young people are particularly affected since they are likely to have substantial unsecured debt and no equity, making it almost impossible to take that first step onto the housing ladder.
We may begin to see a trend whereby those with equity tied up in their homes may begin to sell up to preserve their capital, sparking a crash in the near future.”

Earlier this year, Thomas Charles revealed that the number of adults in the UK in over £10k of unsecured debt had risen to 8.4 million with 2.5 million struggling to meet repayments 1.1 million on the brink of insolvency.