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  • FIRST POST
    • mr auspicious
    • By mr auspicious 14th Sep 18, 9:17 AM
    • 47Posts
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    mr auspicious
    Brexit, Mark Carney and the housing market
    • #1
    • 14th Sep 18, 9:17 AM
    Brexit, Mark Carney and the housing market 14th Sep 18 at 9:17 AM
    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. Iím 2 to 3 weeks away from exchange so Iím fearing the worst with buyers further down the chain.

    What are everyoneís thoughts on this sorry situation?
Page 1
    • Nick_C
    • By Nick_C 14th Sep 18, 9:22 AM
    • 4,439 Posts
    • 6,393 Thanks
    Nick_C
    • #2
    • 14th Sep 18, 9:22 AM
    • #2
    • 14th Sep 18, 9:22 AM
    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.
    Last edited by Nick_C; 14-09-2018 at 9:35 AM.
    • RedFraggle
    • By RedFraggle 14th Sep 18, 9:24 AM
    • 759 Posts
    • 2,146 Thanks
    RedFraggle
    • #3
    • 14th Sep 18, 9:24 AM
    • #3
    • 14th Sep 18, 9:24 AM
    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
    • By shortcrust 14th Sep 18, 9:26 AM
    • 2,149 Posts
    • 3,311 Thanks
    shortcrust
    • #4
    • 14th Sep 18, 9:26 AM
    • #4
    • 14th Sep 18, 9:26 AM
    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
    • By jimbo747 14th Sep 18, 9:50 AM
    • 589 Posts
    • 1,593 Thanks
    jimbo747
    • #5
    • 14th Sep 18, 9:50 AM
    • #5
    • 14th Sep 18, 9:50 AM
    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
    • By mr auspicious 14th Sep 18, 9:50 AM
    • 47 Posts
    • 4 Thanks
    mr auspicious
    • #6
    • 14th Sep 18, 9:50 AM
    • #6
    • 14th Sep 18, 9:50 AM
    https://forums.moneysavingexpert.com/forumdisplay.php?f=149

    Have you looked at this board? Your post may be better there
    Originally posted by RedFraggle
    It would be, thanks
    • Cakeguts
    • By Cakeguts 14th Sep 18, 11:52 AM
    • 5,216 Posts
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    Cakeguts
    • #7
    • 14th Sep 18, 11:52 AM
    • #7
    • 14th Sep 18, 11:52 AM
    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
    • By jimbog 14th Sep 18, 11:53 AM
    • 753 Posts
    • 1,308 Thanks
    jimbog
    • #8
    • 14th Sep 18, 11:53 AM
    • #8
    • 14th Sep 18, 11:53 AM
    Wrong forum - there's one for discussions elsewhere
    The problem with quotations on the internet is that you can never verify their authenticity - Abraham Lincoln
    • ACG
    • By ACG 14th Sep 18, 12:02 PM
    • 17,812 Posts
    • 9,603 Thanks
    ACG
    • #9
    • 14th Sep 18, 12:02 PM
    • #9
    • 14th Sep 18, 12:02 PM
    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
    • By ed67812 14th Sep 18, 12:03 PM
    • 160 Posts
    • 57 Thanks
    ed67812
    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
    • By Thrugelmir 14th Sep 18, 12:08 PM
    • 61,000 Posts
    • 54,205 Thanks
    Thrugelmir
    As far as I can see this has been reported incredibly badly. Itís not a predication but rather one of a set of scenarios used for contingency planning.
    Originally posted by shortcrust
    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.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Nick_C
    • By Nick_C 14th Sep 18, 12:24 PM
    • 4,439 Posts
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    Nick_C
    Despite what the Daily Fail reports...
    Originally posted by ed67812
    Why bring this irrelevant comment into the discussion? All the reports I have heard and read have been on the BBC!
    • Crashy Time
    • By Crashy Time 14th Sep 18, 7:40 PM
    • 6,805 Posts
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    Crashy Time
    Just trying to pin the inevitable property bubble burst on Brexit, as predicted a very convenient scapegoat!
    • Crashy Time
    • By Crashy Time 14th Sep 18, 7:42 PM
    • 6,805 Posts
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    Crashy Time
    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.
    Originally posted by Nick_C

    Wouldn`t be enough to take you to fair value in many areas, hence transactions will continue to fall until rate rises or sentiment/recession bring the long overdue bursting of the property Ponzi.
    • ProDave
    • By ProDave 14th Sep 18, 10:00 PM
    • 1,116 Posts
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    ProDave
    Wouldn`t be enough to take you to fair value in many areas, hence transactions will continue to fall until rate rises or sentiment/recession bring the long overdue bursting of the property Ponzi.
    Originally posted by Crashy Time
    And what would you say was a "fair" price for the average 3 bedroom home to fall to in your ideal world?
    • Crashy Time
    • By Crashy Time 14th Sep 18, 10:05 PM
    • 6,805 Posts
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    Crashy Time
    And what would you say was a "fair" price for the average 3 bedroom home to fall to in your ideal world?
    Originally posted by ProDave

    Depends on the area, in some areas it could be 50k or lower.
    • ProDave
    • By ProDave 14th Sep 18, 10:32 PM
    • 1,116 Posts
    • 1,352 Thanks
    ProDave
    Depends on the area, in some areas it could be 50k or lower.
    Originally posted by Crashy Time
    As you probably know, I am in the process of self building a modest 3 bedroom house.

    Leaving out land cost and planning cost, the actual construction cost is so far standing at £130K and will probably hit £150K by the time it is actually finished. That is just about £1000 per square metre, you really would struggle to build for less than that with todays material and labour costs.

    So even if building land was free and planning permission was free, if you are hoping for a 3 bedroom house to be built and sold for £50K then I can assure you not a single house will get built.
    • AnotherJoe
    • By AnotherJoe 14th Sep 18, 10:40 PM
    • 11,428 Posts
    • 13,198 Thanks
    AnotherJoe
    As you probably know, I am in the process of self building a modest 3 bedroom house.

    Leaving out land cost and planning cost, the actual construction cost is so far standing at £130K and will probably hit £150K by the time it is actually finished. That is just about £1000 per square metre, you really would struggle to build for less than that with todays material and labour costs.

    So even if building land was free and planning permission was free, if you are hoping for a 3 bedroom house to be built and sold for £50K then I can assure you not a single house will get built.
    Originally posted by ProDave
    In another thread yesterday, someone poimted to some houses for sale in Wales. These were newbuilds, 3 bed terraces, looked pretty nice, going for £90k. That would have included land, bulding costs and profit for the builder.
    • Gwendo40
    • By Gwendo40 15th Sep 18, 6:11 AM
    • 176 Posts
    • 195 Thanks
    Gwendo40
    As you probably know, I am in the process of self building a modest 3 bedroom house.

    Leaving out land cost and planning cost, the actual construction cost is so far standing at £130K and will probably hit £150K by the time it is actually finished. That is just about £1000 per square metre, you really would struggle to build for less than that with todays material and labour costs.

    So even if building land was free and planning permission was free, if you are hoping for a 3 bedroom house to be built and sold for £50K then I can assure you not a single house will get built.
    Originally posted by ProDave

    If you're paying £150k JUST on build costs for a 'modest' 3 bed property then someone is seriously taking you for a ride.
    • natcoco
    • By natcoco 15th Sep 18, 7:36 AM
    • 4 Posts
    • 0 Thanks
    natcoco
    Iím in the exact same situation, due to exchange Monday and having serious doubts. Itís not the dream house, we only plan on staying there for 5 years max, itís definitely too small for us to stay in for 10 plus years if there is a crash. Im so confused! I really want a house and Iím sick of renting but I donít want to be in negative equity in 4 years while the current owner gets a cheque for 250k!
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