No deal Brexit could cut house prices by a third, says Bank of England boss

House prices could fall by over a third in the event of a no-deal Brexit, Bank of England chief Mark Carney has warned.

He told senior ministers that in a worst-case ‘stress testing’ scenario, house prices would crash by 35% over three years as mortgage interest rates spiralled, potentially sending millions of home owners into negative equity while making it harder for younger people to get on the housing ladder.

Carney also said, that in this modelling, there could be a slump in the pound as well as a general recession.

According to this morning’s Times newspaper, Carney’s “grim” assessment was not challenged by Brexiteers during yesterday’s three and a half hour special cabinet meeting.

One observer said: “Carney was very spicy. You saw a few eyebrows going up around the room but nobody challenged  him.”

However, the Bank of England governor’s projections were dismissed last night as ludicrous.

Emoov CEO Russell Quirk said: “Mark Carney is supposed to be a custodian of the British economy.

“Instead, he continually indulges in talking it down in order to try to bring about the negative prophecies that he spouts as an ardent Remainer.

“Regardless of his political stance, he would do well to wind his neck in and desist from being such a fiscal Grim Reaper.

“Not one of his forecasts has materialised to any truth and his talk of house prices dropping by a third in the event of a no-deal Brexit is pure fiction, based upon bluff and bluster.”


Email the story to a friend


  1. Will


    1. P-Daddy

      Don’t worry people…its not what he said. He has 3 scenarios where the bean counters have assessed best and worse case scenarios and then looked at how well capitalised the banks, ensuring they can withstand any shocks. If they have money, the eceonomy can be pumped and supported The reference point is the Credit Crunch for obvious reasons. This is politics AND agenda journalism at work.

  2. Property Poke In The Eye

    Brexit or No Brexit.  The house prices need to correct themselves in line with lending criteria.  So at least 30% needs to come off at properties over £500,000.

  3. JonnyBanana43

    This is the chap who said the economy would nose dive if we voted out… it has gone the other way and he is still in a job. Bizarre.

  4. eltell

    As a highly rewarded custodian of the British economy Mr Carney should remember the basic rules of economics in a capilitist society – supply and demand. While there are more people able to buy property than there is availability prices are unlikely to fall.

  5. Eastsidestory90

    Complete and utter tosh!

  6. jackoTLG

    Absolute tosh I’m sick of reading this rubbish. We were told of the doom and gloom after the vote and it never happened.

  7. MisterP76

    Not only tosh but apparently a misinformed leak.

    Why is it whenever there is a “no-news” day the media hammer the housing market?

  8. Robert May

    It is wrong to blame a likely fall in house prices on Brexit, to do so is masking Mr Carney’s failure to increase interest rates in 2014.

    The government  and the bank of England have a bit of a quandry, our economy is reliant on the  artificially high value of our property stock but the high value of property is causing a generational disparity between those who own property and those that want to own property.

    Interest rates used to be an effective way of controlling the economy but because that control  has been effectively disabled because of the reliance on property values, there is no real control over the economy.  Blame it on Brexit seems to be emerging as a very convenient way of  disguising the fact that our economy has not properly recovered from the crash in 2008.






    1. Mark Walker


    2. observer

      How is the UK economy in any way reliant on house prices? Over 70% of the UK economy is service based – if you think the £4bn in estate agent fees or the mortgage lending is in any way important to the success of the UK economy you need to look outside your own industry a bit more.

      Houses are in economic terms simply an asset class. They do not determine an economy in any way. They simply provide an insight into confidence levels in certain assets.

      The interest rate is not an effective way of controlling an economy in a global environment. Macroeconomics 101 would teach you the fallacy of that. A brief scan through the last 20 years would show you that.

      The days of increasing interest rates = reduced inflation are long gone.

      1. Mark Walker

        Properties are a lot of baby boomers’ pension.  Properties determine much of the country’s ability to borrow.  Increases in interest rates on mortgages determine whether much of the country can spend in the service areas or not.

      2. drasperger

        Personal debt is now higher than before the financial crash……for many, borrowing is still linked to notional property value.  A correction in residential values will stop spending; surely that would have some impact on the economy?

      3. Robert May

        A 1% rise or fall in property prices is worth about £39b to the economy, Mr Carney is warning of a possible 35% reduction and you are suggesting that removing that much asset from the economy won’t have any affect at all, I’m afraid my understanding of economics is different to yours.





      4. Ostrich17


        You do realise that a substantial increase in interest rates/fall in house prices will destroy the banks and have knock on effects for the entire economy ?

  9. Woodie0636

    Why do we pay this guy millions a year all he seems to do is run the country down and make predictions that have been proven to be wrong time and again,they should get rid of him.

  10. AgencyInsider

    House prices cut by a third? Good.

  11. smile please

    Well, after watching Location, Location, Location last night, I think i may well move to Lancashire as it looks like house prices have already been hit by a 2/3 drop compared with my little part of the world.

    Phil, Kirsty – Sign me up!

    1. Mark Walker

      Was it Burnley?

  12. DarrelKwong43

    This is a more accurate reflection of what was said yesterday

    he was not forecasting what would happen at a no deal brexit ONLY that they has been stress testing the banks for a 1/3 fall in house prices, 4% interest rates and a doubling of unemployment

    as trump would say, this article on PIE is *fake news*

    1. Eyereaderturnedposter12

      Its not often (these days at least!) that you see the BBC being quoted as a source of accurate reporting 😉

  13. Harree Is Back

    It wouldn’t need anywhere near a 30% drop to cause he property market to really stall and fall.

    If there is a general UK wide drop of 5% to 10% and the media headlines it to Brexit,, and especially a no deal Brexit which will affect everybody, the smelly stuff could really hit the fan.

    The shock from 2008 and the fear and issues it caused to millions of homeowners hasn’t been forgotten.

    I agree with Robert May that Brexit is a symptom not the cause of a potential drop in prices but the British public and their confidence or otherwise in their personal financial situation is hugely influenced by house prices. The aftermath from 2008 means underlying confidence is weak and it won’t take much media sensationalism for many homwowners to adopt a bunker attitude and stay put.

    There are  major companies who specialise in debt and negative equity who are geared up and ready to capitalise on what they believe is an opportunity just waiting to happen.

  14. CaptainObvious

    Propaganda, nothing more nothing less.

    A rolling loan gathers no loss.

  15. Ric

    Prices need to be corrected AND most importantly we need some bants with the HPC nut brigade.

    The HPC nut brigade will replace the OOEA nut brigade as people stop gambling £995 in a downward market.

    Win win for me! I always loved a good old debate with that lot.


You must be logged in to report this comment!

Leave a reply

If you want to create a user account so you can log in, click here

More top news stories

Legal bodies unveil template to allow exchanges to be delayed amid coronavirus pandemic

Continue Reading ...

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.