As we know, World War Three is going to break out in the event of a Brexit (Cameron), the stock market will crash (International Monetary Fund), and house prices are going to drop like a stone (Osborne and the NAEA).
Really? By 10% or even as much as 18%, George?
In fact, the Chancellor was talking about the predicted rate of growth in house prices, which makes the maths slightly complicated – so we’ll go with the Telegraph’s number crunching which says that the fall in cash value would be between £1,752 and £25,112. The sums are based on the ONS’s latest average house price (for March) of £292,000.
And what about those headlines that estate agents are predicting a fall in house prices in the event of a Brexit?
In fact, while forecasting a small wobble in the second half of this year, the NAEA – using different figures for its starting point – said that house prices would still go up in the event of a leave vote, just by not quite as much.
| How would an EU exit affect average house prices? | ||
| Year | Remain in EU | Leave EU |
| 2016 | £278,500 | £277,600 |
| 2017 | £290,800 | £288,900 |
| 2018 | £303,000 | £300,800 |
| London | ||
| 2016 | £536,000 | £533,700 |
| 2017 | £564,500 | £559,300 |
| 2018 | £599,200 | £591,700 |
| source: NAEA/ ARLA/ CEBR | ||
So there you have it. House prices varying by a whisker in two years’ time.
Obviously the world will end.
Marc Shoffman’s coverage of the NAEA report is below.
Don’t you just love politics?
I might vote to Leave just to spite Cameron and Osborne.
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I think there is already evidence of how the threat of leaving the EU has affected the housing market this year. There is no question things are a lot tougher in the South at least. Asking prices are coming down and deals are being agreed about 3% under asking.
As always this information takes time to filter through as its coal face information but I am in no doubt if we leave I can see things being this way or worse for a good 12 months.
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Forgive me for being short-sighted, RA, but I think the supply/demand crisis is going to increase prices at the same rate it is now once the immediacy of the Brexit wears off.
London property will suffer due to lower foreign investment, and this will send out ripples to the South and maybe as far as the Midlands north, but people are still going to be clamouring for houses elsewhere.
In short, prices will fall as they would after an election, but the UK housing market has prominent issues that will continue to skew it at an unsustainable rate regardless of the deceleration of a Brexit (which is unlikely to happen anyway!).
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The pont for me mrharvey is that prices have already come down, we are not getting the same prices we were for property 6 months ago.
Don’t get me wrong personally I have no real loyalty to staying in the EU but I am taking a purely selfish stance which is that I remember the various recessions over the last 30 years and the one thing that I believe is undisputed, even by you reading your comments, is that there will be a prolonged down turn.
Yes, we can argue the social view point that prices coming down makes things easier for First Time Buyers but the reality is we don’t do controlled downturns and given the fragility of the economy anyway, I can’t leaving is good for any owners of estate agency businesses.
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I agree, prices have indeed got more realistic and less property coming to the market AND fees are continued to be eroded.
However i feel its just uncertainty in the market as we have whenever a general election arises.
To be honest i like the market we are now in, its less about listing more about selling. I know a few agents that have tried to stretch themselves expecting the market we had for last 2 years continued long term (naive and inexperienced). I think we will start to see a lot of complaints from people duped into using online only agents and also a lot of poor high street agents will disappear.
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I don’t disagree with any of your comments Smile, yes it is a more “quality agent” friendly market. Yes many of the online only agents will start to see higher volumes of dissatisfied customers as the internet doesn’t sell quite as many properties for them.
My worry is that we don’t need the uncertainty that leaving the EU brings and of course that uncertainty or the gamble of whether things be better outside of the EU will go on for sometime.
We had a general election last year and there was nothing like this, so I am not convinced its just a normal pre election downturn. Either way, the seemingly few advantages of leaving the EU doesn’t counter balance a market, that could be in decline for two years or more, after voting to leave.
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Yes it’s great when the vote to remain politicians are clearly working on a vote leave campaign by making stupid remarks. Not that politicians exactly have much by way of gravitas, Boris comes to mind, but making inane, childish and downright ridiculous remarks in a “clutching at straws” attempt to keep Britain in doesn’t help at all.
Please vote to stay in.
Please ignore all politicians.
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Please ignore Property Paddy.
Please vote OUT.
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I feel we should all do our own research and make our own decisions. There are some very good videos on YouTube exploring both sides of the argument. I recommend:
Brexit the movie
and
The Spectator Debate on Brexit
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Leave this abusive relationship of 40+years. Gain back control. Have some self respect. Dont rely on people we cannot elect or remove to govern the UK.
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Mr Harvey & Smile Please.
This is much more important than a general election! This is about reappraising our trading and political position in the world for well into the next half of this century. If you ignore the ridiculous scaremongering from both sides of the debate and listen to the economic experts and few politicians that are around who look at the debate on a reasoned level, it is quite clear that Britain will be at a major trading disadvantage if we leave one of the world’s largest blocks in which we already have some major opt-outs. And as for being an independent nation once again, a successful leave vote will trigger another Scottish independence vote which will almost certainly be “out” so we will no longer have a United Kingdom and our political position in the world, where we already punch far above our weight, will plummet overnight. If that does not create uncertainty and a major fall in the housing market, I can’t think of anything more than international conflict that would!
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I never claimed it wasn’t.
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So my kids might be able to afford to buy a house and it will be cheaper for me to move up the ladder. It’s a good argument to support leaving the EU. Ironic!
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Except that when prices tumble its only those that have to move sell creating a shortage. That shortage doesn’t create a boom because buyers get nervous that they still might be paying too much. First time buyers still don’t get it easy because mortgage lenders tighten their lending as they can’t rely on the valuations.
As for you moving up the ladder, well that depends on whether you can sell, whether you can find something to buy and indeed whether I suspect you still have a job to pay for it all.
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There is a missing phrase in all of this, for in or out. The principle has set the test of time every since man built a mud hut. The city and the bank of England works on it every day. “market forces will eventually level out, whenever their is a blip in either direction”. All I hear is scaremongering from the “IN” as that is all they can come up with, they have no hard and fast facts. They said the same about the millennium bug, we say the same the week before every chancellors budget ….. and we get on with life and markets stabilise!
We signed up to a trade deal (common market) not a political system that we have no control over. Someone said our world standing would be at risk …. er how many civilised countries are not in the EU and still work, not forgetting our commonwealth and that is why the Europeans don’t want us to leave as we are their back door entry.
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