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Brexit Triggers House Price Crash

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Mr Bearbull is the longest running columnist in The Investors Chronicle, over the years he's made me a fair amount of money so I listen carefully to what he has to say.

This week he argues that Brexit would be the key to a HPC, particularly in London and the South East. His logic is that ultra low interest rates have obscured the deeper reality of income/price ratios (6.8x for England & Wales, not the absolute highest but far above average, however London is 14.1x which is an absolute record). In the event of Brexit foreign city workers would move from London to Frankfurt and Basel, overseas property investors would rethink the UK's "safe haven" status, and there would be a run on sterling which would drive up interest rates. He further argues that even though these three factors would trigger a relatively quick correction the unwinding may well continue longer as "the City's faltering performance means that the UK's lousy balance of payments are further weakened and it becomes increasingly difficult to persuade foreigners to fund the deficit". He then adds a third level scenario in which a government, desperate for post Brexit growth, sweeps away planning regulations. Put it all together and he envisages, "By the close of 2017 house prices across England and Wales are 25% lower than two years earlier. In London prices fall by 40%, and in Kensington and Chelsea,...,prices halve."

I always tend to pay more attention to someone arguing a case against their own personal interest; so when a long established, boomer columnist; with an audience of boomer BTL landlords; and a reputation for sober, measured predictions, writes something like this then it's especially worth reflecting on.

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Its a nice thought, but I doubt it...even Boris, who seems to be pretty chummy with the city boys, despite being generally pro-immigration and all that other jazz, has spoke out against the EU when it comes to the city and regulation. I mean, switzerland is hardly devoid of banksters is it...nor did being outside the EU but the brakes on Iceland's descent into rampant banksterism.

Bankster's will go wherever local laws are stacked most in their favour. Political union or no political union does not affect that.

If it did happen though, I'd rather a 50% crash nationally, and 80-90% in London. In fact if finance did desert London (which I think needs to happen for the rest of the nations sake) I think London would have a value close to zero. I think Ethnically, socially, culturally, if the money stops flowing, its a tinderbox and would very soon resemble Detroit.

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It could go the other way though couldn't it?

Depending on the relative performance of the eurozone, weighed down by the burden of the indebted mediterranean countiries, its financial services sector drowning in red tape from Brussels, then maybe - just maybe - London as a key financial centre could become stronger.

More bankers moving to the UK from Frankfurt and Zurich....

then what?

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Brexit could trigger a crash. But this suggests a Brexit mustn't be allowed. The campaigns practically write themselves: "Don't vote to leave Europe - Your House Price Might Fall"

I wonder what those who are Pro-HPI and Eurosceptic make of the claim that Brexit would trigger a crash.

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Mr Bearbull is the longest running columnist in The Investors Chronicle, over the years he's made me a fair amount of money so I listen carefully to what he has to say.

This week he argues that Brexit would be the key to a HPC, particularly in London and the South East. His logic is that ultra low interest rates have obscured the deeper reality of income/price ratios (6.8x for England & Wales, not the absolute highest but far above average, however London is 14.1x which is an absolute record). In the event of Brexit foreign city workers would move from London to Frankfurt and Basel, overseas property investors would rethink the UK's "safe haven" status, and there would be a run on sterling which would drive up interest rates. He further argues that even though these three factors would trigger a relatively quick correction the unwinding may well continue longer as "the City's faltering performance means that the UK's lousy balance of payments are further weakened and it becomes increasingly difficult to persuade foreigners to fund the deficit". He then adds a third level scenario in which a government, desperate for post Brexit growth, sweeps away planning regulations. Put it all together and he envisages, "By the close of 2017 house prices across England and Wales are 25% lower than two years earlier. In London prices fall by 40%, and in Kensington and Chelsea,...,prices halve."

I always tend to pay more attention to someone arguing a case against their own personal interest; so when a long established, boomer columnist; with an audience of boomer BTL landlords; and a reputation for sober, measured predictions, writes something like this then it's especially worth reflecting on.

That sounds like a "reason" why boomers should not vote for a brexit the boomer demographic seems to be the ones more in favor of a brexit so from that point of view i see this more of a boomer pedaling there VI propergander scare stories but i suspect his analysis of the possible repercussions concerning the housing market is right

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Brexit could trigger a crash. But this suggests a Brexit mustn't be allowed. The campaigns practically write themselves: "Don't vote to leave Europe - Your House Price Might Fall"

I wonder what those who are Pro-HPI and Eurosceptic make of the claim that Brexit would trigger a crash.

Brexit could trigger a crash. But this suggests a Brexit mustn't be allowed. The campaigns practically write themselves: "Don't vote to leave Europe - Your House Price Might Fall"

I wonder what those who are Pro-HPI and Eurosceptic make of the claim that Brexit would trigger a crash.

Quite...as nasty and low as the anti-scottish independence campaign was, Im sure the EU-in one will be worse.

already their line seems to be UKIP and the anti-EU lot are scaremongering!

how so?

EU out campaign: We have lost control of our borders and law making sovereignty. This is current and historical fact explicitly accepted by the IN lot by their focus on 'reform', suggesting they actually agree there is something very wrong.

EU in campaign: If we leave, no one will trade with us, they'll send every briton living abroad home, no one will talk to us or sell us their goods and your house will be worth nothing. This is pure speculation, defying both logic and history.

And yet we're supposed to believe the latter?! and that the former is 'scaremongering'

The out campaign is a message of hope, not scaremongering. We can do better with full sovereignty. While that might be a debate worth having, I see no scaremongering there.

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