Reducing all UK property prices by 90% would have profound and far-reaching consequences across the entire economy and society. Let me outline the major impacts:

Economic Impacts

1. Housing market collapse: A 90% reduction would be catastrophic, creating an immediate housing market freeze as owners resist selling at such massive losses.
2. Banking crisis: UK banks hold approximately £1.6 trillion in mortgage debt. With properties worth just 10% of their former value, most mortgages would be underwater, potentially causing widespread bank failures and requiring government intervention.
3. Household wealth destruction: Property is the largest store of wealth for most UK households. This reduction would wipe out approximately £6-7 trillion in household wealth.
4. Consumer spending crash: The negative wealth effect would severely reduce consumer spending, likely triggering a deep recession.
5. Construction industry collapse: New construction would halt as building costs would far exceed market values.

Social Impacts

1. Negative equity crisis: Millions of homeowners would owe more than their homes are worth, leading to potential mass mortgage defaults.
2. Intergenerational wealth transfer: While devastating for current owners, particularly older generations, it would dramatically improve affordability for young people and renters.
3. Housing mobility increase: Once markets stabilize, more people could relocate for jobs or other opportunities due to lower housing costs.

Government and Policy Impacts

1. Tax revenue collapse: Property taxes, stamp duty, and capital gains tax revenues would plummet.
2. Massive intervention needed: Government would likely need to nationalize banks, guarantee deposits, and implement emergency economic measures.
3. Local government funding crisis: Councils heavily dependent on property taxes would face severe budget shortfalls.

The overall result would be an economic catastrophe worse than the 2008 financial crisis, though followed eventually by a significant rebalancing of housing affordability. However, the transition would be extremely painful and disruptive.

Alternatives to Make Property Affordable

There are several policy approaches to improving housing affordability without the economic devastation of a 90% price crash:

Supply-Side Solutions

1. Increase housing supply

• Reform planning laws to allow higher density development
• Release more land for housing through zoning reforms
• Streamline building permits and reduce regulatory barriers
• Incentivize brownfield development and urban infill

1. Alternative housing models

• Expand community land trusts that keep land in community ownership
• Support housing cooperatives and shared ownership schemes
• Encourage modular and prefabricated construction to reduce costs
• Develop purpose-built rental properties at scale

Demand-Side Solutions

1. Reform property taxation

• Replace council tax with a progressive property value tax
• Implement land value taxation to discourage land banking
• Reduce or restructure stamp duty to improve mobility
• Higher taxes on second homes and vacant properties

1. Financial interventions

• Improved rent-to-buy schemes
• Shared equity programs with gradual ownership increases
• Subsidized mortgages for first-time buyers
• Longer mortgage terms (35-40 years) with protections

1. Cool speculation

• Restrict foreign investment in residential property
• Higher capital gains taxes on short-term property flipping
• Strict regulations on buy-to-let investments
• Limit mortgage availability for investment properties

Location-Based Solutions

1. Regional development

• Invest in infrastructure and jobs in lower-cost regions
• Decentralize government and corporate offices
• Improve transport links to enable longer commutes
• Support remote work to reduce location dependencies

1. Public housing innovation

• Modern, high-quality public housing developments
• Public-private partnerships for affordable housing
• Rent controls with built-in flexibility mechanisms
• Municipal housing companies like those in Vienna

A balanced approach combining multiple strategies would likely be most effective, addressing both supply constraints and demand pressures while avoiding economic shocks.