35% drop in house prices coming Watch

username2837176
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No deal Brexit is coming and The Bank Of England Governor Mark Carney says house prices will drop 35%!!

Whoop whoop it’s about time house prices corrected to a better income vs house prices ratio.

Average U.K. house prices currently stand at £230,000. 35% drop would mean average house prices falling to under £150,000 - which is much better for young people who have the aspiration to own a home!
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ChaoticButterfly
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I like how none of the Brexiteer Tories never bring this up. Reminds me of that amusing quote from Marx.


“The Tories in England long imagined that they were enthusiastic about monarchy, the church, and the beauties of the old English Constitution, until the day of danger wrung from them the confession that they are enthusiastic only about ground rent.”
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daily_stoic
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Also great for Buy-to-Lets
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winterscoming
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Actually, no. What Mark Carney is suggesting would be an utter disaster for first-time buyers.

He's expecting that interest rates would soar back up to the levels they used to be at in the 1980s, so nobody would be able to afford a mortgage due to the cost of interest repayments.
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username1221160
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(Original post by mattymoo432)

Whoop whoop it’s about time house prices corrected to a better income vs house prices ratio.
Firstly, this was a worse case scenario situation.

Secondly, you've ignored the increased in unemployment, inflation and interest rates. That is far from good for young people.
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Fullofsurprises
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(Original post by mattymoo432)
No deal Brexit is coming and The Bank Of England Governor Mark Carney says house prices will drop 35%!!

Whoop whoop it’s about time house prices corrected to a better income vs house prices ratio.

Average U.K. house prices currently stand at £230,000. 35% drop would mean average house prices falling to under £150,000 - which is much better for young people who have the aspiration to own a home!
Be careful what you wish for. If interest rates are at 5 or 10% due to the collapsing £ following Brexit, then yes, house prices will move sharply lower, but nobody will be able to afford a mortgage, so the net benefit to first time buyers will be either nil or negative. Also unemployment will be about 7m and wages will fall below the level at which they can be detected by human scrutiny.
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nulli tertius
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(Original post by mattymoo432)
No deal Brexit is coming and The Bank Of England Governor Mark Carney says house prices will drop 35%!!
It is unfortunate that of all the "dangers of Brexit" news today, the one the press have fastened on is the one that is the most speculative.

There are so many moving parts in the housing market, that get any one of them wrong and the forecasts can be way off.
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Reality Check
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Any forecasts which go beyond the end of next week are rash. To attempt to forecast what might happen to house prices over the next year/two years is like trying to forecast the weather in Horsham on 14 April 2019.
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ajj2000
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(Original post by TheProctor)
Also great for Buy-to-Lets
Except for existing landlords who slip into negative equity or below the capital percentage required by banks and see their interest rates fly up as a result.
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ajj2000
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(Original post by winterscoming)
Actually, no. What Mark Carney is suggesting would be an utter disaster for first-time buyers.

He's expecting that interest rates would soar back up to the levels they used to be at in the 1980s, so nobody would be able to afford a mortgage due to the cost of interest repayments.
In the 1980's (and the first half of the 1990's) graduates frequently bought houses within a year of starting their first job. Now people save for the deposit to get a rental place to live in.......
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the bear
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it will end in tears

:emo:
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AnharM
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(Original post by mattymoo432)
No deal Brexit is coming and The Bank Of England Governor Mark Carney says house prices will drop 35%!!

Whoop whoop it’s about time house prices corrected to a better income vs house prices ratio.

Average U.K. house prices currently stand at £230,000. 35% drop would mean average house prices falling to under £150,000 - which is much better for young people who have the aspiration to own a home!
I very much doubt this includes properties in London though...
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nulli tertius
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(Original post by AnharM)
I very much doubt this includes properties in London though...
House prices in London are the most reactive in the country. If they fall, they will fall furthest and quickest in London.
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username2837176
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London house prices already falling too after rising 70% in 5 years! Ridiculous.
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paul514
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(Original post by mattymoo432)
No deal Brexit is coming and The Bank Of England Governor Mark Carney says house prices will drop 35%!!

Whoop whoop it’s about time house prices corrected to a better income vs house prices ratio.

Average U.K. house prices currently stand at £230,000. 35% drop would mean average house prices falling to under £150,000 - which is much better for young people who have the aspiration to own a home!
I think it’s hilarious, the idea prices can fall that much during a housing crisis backed up by erm... nothing.
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fallen_acorns
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fingers crossed!

This would be the perfect storm of awesome for me and my wife if this happens!

We are looking to buy a house within the next 2 years, and are 100% cash buyers. A drop in prices would be amazing, and an increase in interest rates won't affect us at all as we will not be borrowing a penny. In fact, it will probably just boost our savings higher!

---

We are not normal though, and our ability to save is vastly inflated due to earning above average wages, yet living in a country that costs 10% of what it costs to live in the UK.

For most young British people, as said above - it wouldn't help to much. Yes it would lower the amount you need to borrow, but the gains from that would be negated by rising interest rates - it may work out slightly more beneficial than now, but I doubt majorly so. (and the effect on the wider economy would be disastrous, so who knows what would happen with wages!)

If this happens - my plan is clear.. buy a house in England when the prices are low - keep my business/work in China, until the UK economy is more stable.
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Napp
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(Original post by mattymoo432)
No deal Brexit is coming and The Bank Of England Governor Mark Carney says house prices will drop 35%!!

Whoop whoop it’s about time house prices corrected to a better income vs house prices ratio.

Average U.K. house prices currently stand at £230,000. 35% drop would mean average house prices falling to under £150,000 - which is much better for young people who have the aspiration to own a home!
I'm not sure if you're being ironic or if you actually think a house price crash would genuinely help people?
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Napp
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(Original post by paul514)
I think it’s hilarious, the idea prices can fall that much during a housing crisis backed up by erm... nothing.
Might one inquire as to what authority you speak with on the matter? That is to say as opposed to Mr Carney?
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winterscoming
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(Original post by ajj2000)
In the 1980's (and the first half of the 1990's) graduates frequently bought houses within a year of starting their first job. Now people save for the deposit to get a rental place to live in.......
That doesn't change the fact that interest rates were in the region of 15% or higher. That would have been an affordable interest rate in the 1980s because you could get a house for £40k in most parts of the country, and the ratio house prices versus average annual earnings used to be be much closer - more like 2.5:1 compared with the 7:1 ratio that we see now.

These days those same interest rates would ruin most peoples' chances of getting a mortgage - there's a huge difference between paying 15% on a mortgage of £40k in the 1980s compared with 15% on a 2018 mortgage of around £200k - the repayments would be huge.

Even if house prices dropped by 35%, they'd still be many times greater than they used to be in the 1980s. Wages haven't kept up with the increase in house prices, so people will find it much harder to cope with higher interest rates.
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Reality Check
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(Original post by Napp)
Might one inquire as to what authority you speak with on the matter? That is to say as opposed to Mr Carney?
Probably has 8 A* at GCSE and is going to apply to Oxford for Medicine (but am I good enough)?
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