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For the article, published on January 17, the FT asked real estate experts to compare previous housing crashes with the current situation.

Professor Barnes told the newspaper that Brexit, alongside other global, financial, social, demographic and technological changes, has made us reconsider the fundamental value of a home.

She said relying on 鈥渕arket exuberance鈥� to justify the value of a home is unstable and unsustainable.

In considering what the future of the UK and other western housing markets might look like, Professor Barnes cited Japan, where house prices have remained slumped since the credit boom of the 1980s was followed by the asset price bust in the 1990s, as a possible scenario for the UK.

Japan鈥檚 long period of low inflation and falling, then permanently low, interest rates was about 30 years ahead of financial trends in the US, the UK and Europe, she said. Real estate capital values remained on a 鈥渉igh (if bumpy) plateau鈥�, she claims but, after yields stabilised, there has been no capital growth without rental growth.

Professor Barnes added, however, that this new world of low interest rates and low inflation was always going to be inevitable, with or without Brexit. What the effects of Brexit will determine is the way in which rents grow 鈥� or fall 鈥� in different sectors and in different locations. It is this that will determine future capital growth, she claims.

Image: Paul Hanaoka, Unsplash