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sPinwheel

If you voted for Brexit hoping for a house price crash, you made a huge mistake

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It's actually a triple whammy for the xenophobes.

 

Increased foreign buyers due to collapse in pound.

 

Increased cost of foreign goods due to collapse in pound. 

 

Decrease in saving returns due to interest rate cut.

 

I actually posted all this a day after the vote and got abused for it. Probably because I'm a filthy Scot. What am I like?!

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7 minutes ago, Impatiently Waiting said:

It's actually a triple whammy for the xenophobes.

 

 

Nice

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most of my colleagues cited high house prices as a reason  to leave the eu. the logic goes thus: less immigrants = lower house prices, supply and demand, simple. i tried to explain that the market is artificially inflated by various props implemented by central government and that following our departure there will be yet more price sustaining schemes introduced but was roundly dismissed as a fool

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The pound is dropping because of a lack of confidence in the future of the UK due to uncertainty created by the referendum result.

Since foreign buyers are presumably using property purely as an investment, the drop in the pound should be matched by an equivalent decrease in demand for residential property, especially given its significance in the economy. The developers mentioned in the story aren't seeing soaring share prices as suggested, they're recovering post-referendum losses thanks to the BoE stimulus package.

The rise in profits at Savills is, according to them, based on overseas demand for commercial property. But it doesn't appear to feed through to residential, as per the Foxtons results and data on London prices. The dislocation suggests something doesn't add up.

2 hours ago, ThePiltdownMan said:

Any ideas why Savills are doing well but Foxtons less so?

None, even with differing interests in commercial and residential it doesn't make sense.

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This article is typical of a kind of "the bubble is permanent" mindset that permeates the London-centric media. It manages to be wrong on the facts, self-righteous and self-interested, while counselling despair.

But, regardless of your opinion on the EU, it's just flat out wrong to say that a weak pound attracts foreign buyers and pushes up prices. The killer question is: what does the author think was happening before the referendum? Was there a dynamic of the strong pound holding prices back because property was perceived as poor value by foreign investors? Or was it, actually, attracting hot flows of money because the prospect of an appreciating currency was amplifying the returns in a bubble? Strong pound pushes the price of property up; weak pound pushes the price of property up. This is straight up magical thinking.

And all of the indicators suggest that there has, in fact, been a significant re-rating of London property since the pound nosedived.

 

Screenshot 2017-01-14 17.16.21.png

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Brexit hasn't happened yet. We don't know what it will mean, if it happens at all. 

Any short term effects happening now are due to increased uncertainty over the Brexit, they are not due to Brexit itself. 

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17 minutes ago, BuyToLeech said:

Brexit hasn't happened yet. We don't know what it will mean, if it happens at all. 

Any short term effects happening now are due to increased uncertainty over the Brexit, they are not due to Brexit itself. 

Racist

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4 hours ago, Impatiently Waiting said:

It's actually a triple whammy for the xenophobes.

 

Increased foreign buyers due to collapse in pound.

 

Increased cost of foreign goods due to collapse in pound. 

 

Decrease in saving returns due to interest rate cut.

 

I actually posted all this a day after the vote and got abused for it. Probably because I'm a filthy Scot. What am I like?!

Your opening line sullied the rest of your post, which is a shame as it was 100% correct.

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4 Additional factors affected sterling.

1) The BOE printed tens more billions in QE and even bought foreign assets with that freshly printed money, hence selling the pound to buy those assets - QE squared if you like in terms on affect in sterling valuation

2) The BOE dropped rates again.

3) The BOE talked down the economy as a result of the Brexit vote.

4) The BOE talked down sterling as a result of the Brexit vote.

A few of those above were no doubt known likely to happen by currency traders (knowing full well what unapologetic bed wetting money printers the BOE are) so the BOE effectively gave traders a free pass to short the shit out of sterling from the get go which continued for a good many months.

All totally unnecessary.

 

 

 

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Not much of a tripple whammy as the pound hasn't really collapsed as the term is vague and open to interpretation. I consider it as a small devaluation of around 10%.

The cost of foreign goods has not significantly risen as there is generally a significant markup built in to deal with currency fluctuations. As an example franchised car dealers use low-rate finance, cash-back and deposit paid out of the difference and there is still plenty of that available.

Decrease in savings returns is complete ****** as it was bugger all before the so called vote.

I imagine this is generally why Carneys predictions et al are so wide of the mark.

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Does everyone feel ashamed of themselves for voting the wrong way now... they keep rubbing it in.

Edited by 200p

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6 hours ago, sPinwheel said:

For every potential foreign investor looking at the UK prices having dropped (in their currency) there will be an actual current foreign investor looking at the UK prices having dropped, causing them a financial loss (in their currency if not in GBP).

The puff piece has all the hallmarks of having been written by some estate agent desperate to drum up any kind of positive spin.

One of the things helping the London market was the strong pound making already high prices look like they were rising even faster when measured in FC.

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1 hour ago, onlyme2 said:

4 Additional factors affected sterling.

1) The BOE printed tens more billions in QE and even bought foreign assets with that freshly printed money, hence selling the pound to buy those assets - QE squared if you like in terms on affect in sterling valuation

2) The BOE dropped rates again.

3) The BOE talked down the economy as a result of the Brexit vote.

4) The BOE talked down sterling as a result of the Brexit vote.

A few of those above were no doubt known likely to happen by currency traders (knowing full well what unapologetic bed wetting money printers the BOE are) so the BOE effectively gave traders a free pass to short the shit out of sterling from the get go which continued for a good many months.

All totally unnecessary.

 

 

 

Seems the blame lies squarely with the Bankster Scumbags.

But we already knew that.

Edited by GreenDevil

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5 hours ago, ThePiltdownMan said:

Any ideas why Savills are doing well but Foxtons less so?

According to Saville's own report, they have focused on the commercial sector and after a brief post referendum pause as a result of the devalued pound this is now being boosted by an influx of foreign money.    

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8 hours ago, Impatiently Waiting said:

It's actually a triple whammy for the xenophobes.

 

Increased foreign buyers due to collapse in pound.

 

Increased cost of foreign goods due to collapse in pound. 

 

Decrease in saving returns due to interest rate cut.

 

I actually posted all this a day after the vote and got abused for it. Probably because I'm a filthy Scot. What am I like?!

So your triple whammy was:

Collapse in the pound, collapse in the pound, and interest rate cut.

So in reality just the GBP movement, and the interest rate cut Carney snuck in to exacerbate the GBP movement.

We can readily fix all that. Just put up interest rates.

 

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25 minutes ago, SpectrumFX said:

So your triple whammy was:

Collapse in the pound, collapse in the pound, and interest rate cut.

So in reality just the GBP movement, and the interest rate cut Carney snuck in to exacerbate the GBP movement.

We can readily fix all that. Just put up interest rates.

 

The collapse in the pound  happened immediately after the vote, it recovered slightly after the interest rate cut.

 

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15 minutes ago, Confusion of VIs said:

The collapse in the pound  happened immediately after the vote, it recovered slightly after the interest rate cut.

 

It only stopped dropping when the BOE stopped talking it and the economy down. The markets pre-empted the rate cut and more desperate QE which caused a lot of the weeks prior and post the actual rate cut and QE.

http://www.telegraph.co.uk/business/2016/08/04/super-thursday-markets-brace-for-bank-of-england-interest-rate-c/

Pound plunges as Bank of England cuts interest rates for first time since 2009

 

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