Why I would be celebrating if Brexit led to lower house prices

Mortgagefreeman

Fitch, the credit rating agency, today warns that Brexit might lead to a 25pc correction in house prices, bringing them down to what Fitch believes is their long term "sustainable" level. I don't mean to be irresponsible, but good; this would be very welcome.

There are few things likely to turn me into a Brexiteer, but the prospect of falling house prices might just do it, and I speak here as someone with some degree of housing wealth. A Treasury assessment of the short term consequences of Brexit, due to be published in the next week or so, is expected to focus heavily on this supposed bogey. But I wonder whether a sharp correction in the housing market is in fact the unarguable harm presumed, or even if it is true that Brexit would lead to such an outcome.

Unless you are a buy-to-let landlord - a tiny minority of the population - or about to sell up and leave the country, the price of houses doesn’t matter. Indeed, if prices were a bit cheaper, and therefore more affordable, I would wager that most people would be a good deal happier.

http://www.telegraph.co.uk/business/2016/05/16/why-i-would-be-celebrating-if-brexit-led-to-lower-house-prices/

Well said young man.

cells

Brexit wont lead to lower house prices only recessions do that

Brexit might lead to a recession which might lead to lower house prices and higher taxes and lower services and about a million people fired and many more getting paid a lower wage than they otherwise would get

cells

The article is weak its a Westminster journalist looking at prices not far from Westminster. Tell the good people of the North East that on top of their 20% house price crash (2006-->2016) another 25% off would be good for them!

He then complains that the UK builds too few new homes, what does he expect will happen to the build rate if prices fall 25% especially in the North and Midlands and Wales

jay213

So a Brexit vote if you want the chance of a cheaper house. Let all the youngsters know, this might get them out to vote. If you have a house/mortgage already it doesn't really affect you, it's relative...your house goes up so does the one you want to move too, same with them going down. I'm sure everybody would rather more money in there pockets.

CLAPTON

cells wrote: »

Brexit wont lead to lower house prices only recessions do that

Brexit might lead to a recession which might lead to lower house prices and higher taxes and lower services and about a million people fired and many more getting paid a lower wage than they otherwise would get

a brexit with vastly lower immigration, will lead to lower house prices, whilst retaining prosperity and full employment and higher wages.

westernpromise

CLAPTON wrote: »

a brexit with vastly lower immigration, will lead to lower house prices, whilst retaining prosperity and full employment and higher wages.

We know this because you say so.

CLAPTON

westernpromise wrote: »

We know this because you say so.

economic theory and much empirical evidence, suggest that price, is determined, by supply and demand.
If the demand fell or at least stabalised then it is reasonable to suggest that the price would over time fall due to the new supply.

why do you disagree with this?

economic

CLAPTON wrote: »

economic theory and much empirical evidence, suggest that price, is determined, by supply and demand.
If the demand fell or at least stabalised then it is reasonable to suggest that the price would over time fall due to the new supply.

why do you disagree with this?

merely talking about immigrants and increasing population alone does not mean prices rise. its about whether enough of these people are able to buy. you are too simplistic and narrow minded in your thinking.

CLAPTON

economic wrote: »

merely talking about immigrants and increasing population alone does not mean prices rise. its about whether enough of these people are able to buy. you are too simplistic and narrow minded in your thinking.

Increasing population increases the demand for living space:
some will be able to buy and so increase pressure of price and some will need to rent.
Those renting will increase the rental prices which will increase landlord profits.
The increase in landlord profits will make letting business more financially attractive and so encourage new entrants into the market and higher prices.

The overall effect is that more people wanting accommodation will increase the price of property unless supply rising appropriately.

This is clearly shown in London with a decrease in owner occupation and a rise in rental properties and rising rents and house prices.

cells

If there is a brexit and if it leads to population growth going from +500,000 a year towards say a flat population then the north the midlands wales and perhaps even Scotland will face a fate of ever falling population and the problems that will cause. Although nationally the population would be about flat there is and will be more internal migration to London and the SE leaving rUK to face a fate of depopulation.

In the long run this will be quite a big negative for the people and families in those regions. If I lived in the north and national population growth was reduced lots thanks to a brexit I would see if it was possible to move our family south sooner rather than later

CLAPTON

cells wrote: »

If there is a brexit and if it leads to population growth going from +500,000 a year towards say a flat population then the north the midlands wales and perhaps even Scotland will face a fate of ever falling population and the problems that will cause. Although nationally the population would be about flat there is and will be more internal migration to London and the SE leaving rUK to face a fate of depopulation.

In the long run this will be quite a big negative for the people and families in those regions. If I lived in the north and national population growth was reduced lots thanks to a brexit I would see if it was possible to move our family south sooner rather than later

clearly its nonsense to say a steady population is a bad thing.
better housing, better infrastructure experience, better access to health care etc etc.

it is nonsense to guess there will be more internal migration to London : that will depend on many variables and the situation at the time : its perfectly possible people may choose to leave London as they have done in the past