If we vote for Brexit what happens

cashbackproblems

i partner is an EA and has seen the same thing, partly as they are still valuing properties at ridiculous prices and people know prices are going to decrease, once the message feeds through that there is less demand for properties and this is already seen by the lack of viewings/offers

You can never predict the bottom, but no harm in making offers which values the property at a reasonable level depending on affordability for you and subtracting a small amount for the uncertainty in the market

buglawton

Erm... Cashback, I think you're trying to make a valid point but could you come back and reword that so we can understand it?

ruelle

cashbackproblems wrote: »

i partner is an EA and has seen the same thing, partly as they are still valuing properties at ridiculous prices and people know prices are going to increase once the message feeds through and less demand for properties is seen my the lack of viewings/offers

You can never predict the bottom, but no harm in making offers which values the property at a reasonable level depending on affordability for you and considering the uncertainty in the market

has your partner actually seen any lowball offers being accepted post eu vote?

Generali

buglawton wrote: »

We're drifting a bit... vivatifosi posted an article about the EU trying some good old fashioned protectionism, to cut London off from a large slice of financial services. The point of my quip was, post Brexit we can selectively do the same, quid pro quo with say, the car market.

I guess the difference is that the Eurozone already has the ability to clear Euros, the only problem they would have if they cut off the UK from clearing Euros is that they would need to scale up capacity. That's not a trivial project but should be perfectly possible to do.

The UK is going to struggle to ramp up food or car production in order to replace imports from the EU. There is little point in putting import duties on products that the UK cannot produce itself. 27% of the food consumed in the UK in 2014 was produced in the EU and about 90% of the veggies consumed in the UK were imported.

Clearly the UK does not need to produce its own food. Just as its perfectly reasonable for the UK to import steel it is reasonable to import salad vegetables from Spain for example where they can be grown more cheaply. It would be pretty foolhardy for the UK to put a tax on those imports however unless it could start to produce that for itself.

I think this is where the confusion lies with post-Brexit trade. It's all very well to say that the Germans need the UK's export markets but it's just as valid to state that the UK needs the EU's imports. To understand what shape talks might take we need to understand the make up of imports from the EU, not just take it as a big block and say, "Well we've got the Germans over a barrel innit".

So what does the UK import from the EU? To see that you need to go to this link (opens in Excel).

So we can see that YTD in 2016 the UK imported £94bn or so-worth of goods from the EU. The biggies are:

- Vehicles (ex-trams and trains) £19.73bn
- Food and drink £12.25bn
- Parts for nuclear plants £11.15bn
- Electrical machinery £7.9bn
- Pharma £7.2bn
- Plastics £3.5bn
- Optical & photographic £2.8bn
- [Basically oil, gas and coal] £2.7bn

That's about two thirds of the EU's exports to the UK and a tariff of 5% on those items would cost UK households £3.3bn or £1,250 per household roughly.

Big exports to the EU are:

- Vehicles (ex-trams and trains) £7.5bn
- Parts for nuclear plants £6.5bn
- [Basically oil, gas and coal] £4.9bn
- Food and drink £4.7 bn
- Pharma £4.5bn
- Aircraft, spacecraft, and parts thereof £3.1bn
- Plastics £2.3bn
- Optical & photographic £2.1bn

Could the UK replace EU production of imports with domestic production and imports from elsewhere? TBH I have no idea. For food I think they would struggle. Raw food is pretty low value added stuff and by importing from outside the EU transport costs would rise markedly as would CO2e which post-Paris is an important consideration. CO2e output from the food sector is already about double the average CO2e output by share of GDP. Maybe the manufactured items could be made in the UK or bought elsewhere.

indianabones

ruelle wrote: »

has your partner actually seen any lowball offers being accepted post eu vote?

I've spoken to multiple vendors and EAs since Brexit. You can try yourself.

They lie through and through. Some of the comments they've given me, Brexit has had 0 impact. Brexit won't impact the housing market. Houses are still selling at the same pace. Vendors who still think the economy can survive with these outrageous prices and I have to smile and walk away.

Are they idiots or are they idiots. Almost everyone search for a home has a drawn area or some form of alert set up on rightmove or other property sites. What I can tell you categorically from my search area in Birmingham. Fewer houses are coming on and fewer are selling. I'm not seeing much in the terms of reductions (yet).

Every day I would see 6/7 homes prior to Brexit, at the moment I'm seeing 1/2.

Went to view a house on Sat, expecting a desperate call from the EA tomorrow, I'll have some fun playing with numbers to see his reaction.

ruelle

indianabones wrote: »

I've spoken to multiple vendors and EAs since Brexit. You can try yourself.

They lie through and through. Some of the comments they've given me, Brexit has had 0 impact. Brexit won't impact the housing market. Houses are still selling at the same pace. Vendors who still think the economy can survive with these outrageous prices and I have to smile and walk away.

Are they idiots or are they idiots. Almost everyone search for a home has a drawn area or some form of alert set up on rightmove or other property sites. What I can tell you categorically from my search area in Birmingham. Fewer houses are coming on and fewer are selling. I'm not seeing much in the terms of reductions (yet).

Every day I would see 6/7 homes prior to Brexit, at the moment I'm seeing 1/2.

Went to view a house on Sat, expecting a desperate call from the EA tomorrow, I'll have some fun playing with numbers to see his reaction.

i've also spoken to lots of estate agents about the impact of the vote. only 1 has told me the truth so far - that people have been putting in low offers and there have been reductions in certain boroughs. he told me if things continue as they are he expects to see more reductions across london.

it's nice that buyers are finally wrestling back some power!

cells

Generali wrote: »

I guess the difference is that the Eurozone already has the ability to clear Euros, the only problem they would have if they cut off the UK from clearing Euros is that they would need to scale up capacity. That's not a trivial project but should be perfectly possible to do.

The UK is going to struggle to ramp up food or car production in order to replace imports from the EU. There is little point in putting import duties on products that the UK cannot produce itself. 27% of the food consumed in the UK in 2014 was produced in the EU and about 90% of the veggies consumed in the UK were imported.

Clearly the UK does not need to produce its own food. Just as its perfectly reasonable for the UK to import steel it is reasonable to import salad vegetables from Spain for example where they can be grown more cheaply. It would be pretty foolhardy for the UK to put a tax on those imports however unless it could start to produce that for itself.

I think this is where the confusion lies with post-Brexit trade. It's all very well to say that the Germans need the UK's export markets but it's just as valid to state that the UK needs the EU's imports. To understand what shape talks might take we need to understand the make up of imports from the EU, not just take it as a big block and say, "Well we've got the Germans over a barrel innit".

So what does the UK import from the EU? To see that you need to go to this link (opens in Excel).

So we can see that YTD in 2016 the UK imported £94bn or so-worth of goods from the EU. The biggies are:

- Vehicles (ex-trams and trains) £19.73bn
- Food and drink £12.25bn
- Parts for nuclear plants £11.15bn
- Electrical machinery £7.9bn
- Pharma £7.2bn
- Plastics £3.5bn
- Optical & photographic £2.8bn
- [Basically oil, gas and coal] £2.7bn

That's about two thirds of the EU's exports to the UK and a tariff of 5% on those items would cost UK households £3.3bn or £1,250 per household roughly.

Big exports to the EU are:

- Vehicles (ex-trams and trains) £7.5bn
- Parts for nuclear plants £6.5bn
- [Basically oil, gas and coal] £4.9bn
- Food and drink £4.7 bn
- Pharma £4.5bn
- Aircraft, spacecraft, and parts thereof £3.1bn
- Plastics £2.3bn
- Optical & photographic £2.1bn

Could the UK replace EU production of imports with domestic production and imports from elsewhere? TBH I have no idea. For food I think they would struggle. Raw food is pretty low value added stuff and by importing from outside the EU transport costs would rise markedly as would CO2e which post-Paris is an important consideration. CO2e output from the food sector is already about double the average CO2e output by share of GDP. Maybe the manufactured items could be made in the UK or bought elsewhere.

Food could very easily be produced in the UK

What we import tends to be higher value added foods. So we don't really import say sugar oil flour from France (we might do but it would be an insignificant money sum) instead we import processed foods.
So instead of importing 1kg of ingredients at £0.50 to make a box of chocolate we import a kg box of chocolate for £5


I doubt we would go into this level of micro management but the Uk could in theory place quotas or simply ban certain things. For instance if the UK baned the importing of wine we probably could not replace that with domestic production. But if it happened we would just drink and eat other things that can and would be grown or proceeded on the UK.

What we could surely do is drink more UK bottled water rather than importing £500m of the stuff each year!

cells

The UK could also micro manage other factors too. For instance if London was converted to a car free city (or greatly restricted) that would reduce car demand about 15% (and hence car imports) to be replaced by local tube/bus services. I don't expect or advocate that its just showing how unrelated sectors interplay

Longer term I would hope the invention of self drive vehicles will reduce the need for so many cars. Each car doing more miles in a car lifetime. If that happens it will greatly help net car importers (by value) which the UK is

Generali

cells wrote: »

Food could very easily be produced in the UK

I have my doubts. The UK would find it extremely difficult to produce salad vegetables in December or tomatoes in bulk at all.

That the UK imports 90% of vegetables consumed is very revealing.

Look at the last time that the UK tried to be self-sufficient in food, the 1940-50 period. Most foods had to be rationed and I suspect that having almost no choice of fruit and vegetables in winter and early spring would get pretty boring pretty fast.

What the UK imports tends to be low value add. The UK imports almost £9bn of fruit 'n' veg (the largest import category) but is a net exporter of drinks.

I leave it for other posters to comment on the feasibility of getting rid of cars in London. I suspect that cabbies wouldn't be that impressed to hear that you had closed down their industry!!!

vivatifosi

In terms of food production, the UK could, if it wanted, develop more Thanet Earth type projects. It is a very large, high intensity greenhouse that produces roughly 10% of the country's tomato, cucumber and pepper crops.

https://en.m.wikipedia.org/wiki/Thanet_Earth

The country needs to decide though whether it sees production of food in the UK and food security an important issue. There's also scope to take more product from the commonwealth, providing the transportation costs aren't prohibitive.