Estate agencies such as Foxtons and Purplebricks and housebuilders such as Persimmon and Redrow would feel an immediate impact.
Rightmove, the online property listings company, could fare better as listing properties for sale is an essential service, regardless of price. However, in March, the number of searches from potential buyers fell to its lowest level since June 2020, when the country was in lockdown.
Shares in Mortgage Advice Bureau, a broker, could drop if people stopped moving, but the business would not be directly affected by a price crash – people still need mortgages, even if for lower amounts.
Elsewhere, ancillary businesses such as Ibstock and Michelmersh, the brickmakers, could suffer a fall in demand if housebuilders scrapped or delayed developments.
Among the funds with heavy exposure to banks is Jupiter UK Special Situations, run by Ben Whitmore, which has more than 10pc of its assets in the sector. The manager takes a patient approach, however, so long-term investors may seek to ride out a house price fall.
Dzmitry Lipski of Interactive Investor, another fund shop, said: “The manager recognises that realising value can take a long time, so the average holding period for a stock is often high.”
Funds that have backed housebuilders include Man GLG Income, whose top 10 holdings include Bellway and Taylor Wimpey. Mr Lipski said the fund focused on dividend growth as opposed to the absolute level of yield. This goal, if achieved, should offer investors protection: it’s rare for a company’s share price to fall if it is consistently raising its dividend.
Some individual companies in sectors exposed to a house price crash could even offer an opportunity to more adventurous investors. Ms Montgomery said the housebuilder Bellway was a good bet: it has set a company record for building and has a target to construct 12,200 homes annually for the next two years.
“Whether greater property volumes will equate to an increase in operating profits remains to be seen,” she said. “However, when you factor in its share price, which is around 25pc lower than its pre-pandemic peak, it starts to look interesting.”
Among the banks, HSBC, which makes most of its profits in the Far East, would be better cushioned from a dip in house prices in Britain than some of its competitors, Mr Khalaf said.
As ever, investors’ most powerful defence against shocks such as a house price crash is diversification. Funds minimise the impact of the failure of an individual company, but you can still be hit if a fund has heavy exposure to sectors that are suffering.
Here the answer is to diversify the investment styles your funds adopt, so that they do not all have large proportions of their money in the same companies. You can check fund factsheets, published monthly, to ensure that you are not inadvertently investing in the same stocks many times over.