House price crash 'most likely 2008 risk'

15/01/2008

The likelihood of a house price crash in the UK is greater than any other global risk for the coming year, it has been claimed.

According to the World Economic Forum (WEF), a house price crash has a likelihood of about 15 per cent.

This is greater than the risk of a sharp increase in oil and gas prices or significant political upheavals in China - two other possibilities identified in the forum's Global Risks 2008 report.

Should a house price crash occur in the UK, US and continental Europe, the WEF calculates a combined financial impact in excess of $1 trillion (£511 billion).

Michael Mortimer, senior risk management consultant with St Paul Travelers, recently told the Royal Institution of Chartered Surveyors (Rics) of the dangers faced by practitioners within the housing industry in light of shifting market conditions.

In an article for Rics, he advised valuers that where information on a property is uncertain they should "ensure that the client is informed and any assumptions that are made are clearly set out".

Rics adds that future articles in the series are to include the ways in which "risk management and effective business practices could avoid potential professional indemnity (PI) claims and increase client satisfaction.

But in light of the WEF predictions, some practitioners may prefer to review their PI coverage now to limit their exposure to costly claims in the future.

PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

(c) 2008 Adfero Ltd.

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