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Brexit, Mark Carney and the housing market

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mr_auspicious
mr_auspicious Posts: 50 Forumite
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in House buying, renting & selling
I woke up this morning to reports of Mark Carney telling the cabinet about threats of a 35% drop in house prices and a big rise in interest rates if we end up with a no deal Brexit. I’m 2 to 3 weeks away from exchange so I’m fearing the worst with buyers further down the chain.

What are everyone’s thoughts on this sorry situation?
«1345

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  • Nick_C
    Nick_C Posts: 7,459 Forumite
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    edited 14 September 2018 at 9:35AM
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    IF Carney is right this time, then this is a good time to downsize, but not a good time to upsize.

    If you are relocating to another property of similar value, it is immaterial.

    Personally, I think a 35% drop in house prices would be a good thing, but I don't think it will happen.
  • RedFraggle
    RedFraggle Posts: 1,309 Forumite
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    https://forums.moneysavingexpert.com/forumdisplay.php?f=149

    Have you looked at this board? Your post may be better there
    Officially in a clique of idiots
  • shortcrust
    shortcrust Posts: 2,697 Forumite
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    As far as I can see this has been reported incredibly badly. It’s not a predication but rather one of a set of scenarios used for contingency planning.
  • jimbo747
    jimbo747 Posts: 630 Forumite
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    Even as a home owner with a decent sized mortgage I'd love to see a housing crash. I hope Carney is right for once, none of his other predictions about Armageddon and job losses have happened. Maybe he should have said house prices will double, that would have ensured a crash.

    Wonder if all the youngsters who voted to remain and have no hope of getting on the housing ladder have woken up this morning and gone 'oh... '.
  • mr_auspicious
    mr_auspicious Posts: 50 Forumite
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    RedFraggle wrote: »
    https://forums.moneysavingexpert.com/forumdisplay.php?f=149

    Have you looked at this board? Your post may be better there

    It would be, thanks
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
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    It doesn't really matter as long as you intend to stay in the house for a reasonable length of time. The money tied up in the house isn't available to be spent so if you sell your house for less you buy the next one for less.
  • jimbog
    jimbog Posts: 2,113 Forumite
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    Wrong forum - there's one for discussions elsewhere
    Gather ye rosebuds while ye may
  • ACG
    ACG Posts: 23,727 Forumite
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    When we had the last recession and house prices dropped, the reason they dropped was not because of demand, but because of lack of funds.

    Barclays for example used to only lend a certain amount of money each day. As a broker, you had to reserve the funds and if you did not get there early enough you would have to wait until tomorrow. Some brokers were going in to work at 6am, just to try and get the funds booked.

    So even if there is a drop, chances are prices will bump back up. If you are buying the house as an investment then your investment might not work out - but there is nothing to say it wont. If you are buying a home and plan on being there for 5-10 years, then I doubt you have any problems.

    But just like Mike Carney, nobody has a clue and the key word in what he has said is "may". House prices MAY also go up. They MAY drop by 5% - he has absolutely no idea. Personally, I think house prices in and around London/South East will take a bit of a hit.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • ed67812
    ed67812 Posts: 159 Forumite
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    Despite what the Daily Fail reports, that figure is the very worst prediction based on an overall no deal and all other factors being worst case scenario. If you are buying a house as an investment that leaves you heavily leveraged then I'd personally think twice, if you are buying a family house that you intend to keep for a few years and you're not at the margins of affordability then I'd personally not be changing my plans.

    I fear brexit will be a complete mess. There will probably be a sudden shock, before things settle down again. But the truth is, nobody knows. The interconnected state of markets make prediction so difficult.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    shortcrust wrote: »
    As far as I can see this has been reported incredibly badly. It’s not a predication but rather one of a set of scenarios used for contingency planning.

    He only spoke for 10 minutes to the Cabinet. Comments such as these need to be put into context as to the question asked. Likewise the answer given.

    With the Hurricane threat downgraded. Little news of interest for the 24/7 media to chew on.
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