Post BREXIT House Prices

[Remster500]

Get your Crystal Balls out!

We wanted to move this year and have advertised our house - fortunately we have received 3 offers at asking price and just over. We are mortgage free and fortunately have further savings to put into our new house. This is all great I hear you say!

I will only be borrowing approx £100k which is 15% of new house value but I’m worried about house values plummeting and interest rates rising after 31st October. I’ve heard talk of 30% correction in prices and 6-7% interest rates. It all doesn’t seem possible as it would be crippling to a lot of UK folk but we live in strange times! Our plan is to live in new house for max 20 years, pay off small mortgage, sell and downsize for retirement. We would obviously hope for some substantial capital growth over this period and would therefore not welcome a reduction in house prices in the first year to recover.

Interested to hear others option to get a balanced viewpoint.

[Fittster]

No-deal Brexit could mean near-zero interest rates, says Bank policymaker

https://www.theguardian.com/business/2019/jul/12/n...

[Dick Dastardly]

My view (which is worth about as much as anyone else's, i.e. fk all) is that house prices aren't going to tank. They'll have a little wobble and then it'll be business as usual. One thing I am certain of is that they aren't going to go upwards anytime soon.

I'm toying with the idea of selling off some BTLs and if I do I'll be acting fast, trying to get it done pre-brexit but if not then I doubt I'll get hammered.

[Terminator X]

People have been talking about a "crash" since we had the last one in 2008! Buy your house, live in it and and don't worry is my sage advice.

TX.

Trend is always upwards so even if it did crash just stay put and watch it go up again:

Edited by Terminator X on Friday 12th July 15:21

[JulianPH]

Remster500 said:

Get your Crystal Balls out!

We wanted to move this year and have advertised our house - fortunately we have received 3 offers at asking price and just over. We are mortgage free and fortunately have further savings to put into our new house. This is all great I hear you say!

I will only be borrowing approx £100k which is 15% of new house value but I’m worried about house values plummeting and interest rates rising after 31st October. I’ve heard talk of 30% correction in prices and 6-7% interest rates. It all doesn’t seem possible as it would be crippling to a lot of UK folk but we live in strange times! Our plan is to live in new house for max 20 years, pay off small mortgage, sell and downsize for retirement. We would obviously hope for some substantial capital growth over this period and would therefore not welcome a reduction in house prices in the first year to recover.

Interested to hear others option to get a balanced viewpoint.

Crystal balls are not needed!

You are looking for a 15% loan to value to purchase a family home for the next 20 years, before potentially downsizing.

Whatever you have heard talk of is simply 'talk'. We are not going to see 6% to 7% interest rates again for a generation, for the simple reason that this would bankrupt the majority of people in the country.

BOE interest rates used to control the country. Now, the country controls BOE interest rates.

It shouldn't be like this, but the bank bailout was very much responsible for ensuring this.

[bogie]

So the nationwide chart shows true inflation adjusted house prices not back at 2008 peak levels ? so if you bought in the last peak, not a very good "investment" at all.......wonder how long it will be before we get back to 2008 real values ?

[Nickyboy]

Whatever happens, it's not going to happen overnight.

[Oilchange]

Fittster said:

No-deal Brexit could mean near-zero interest rates, says Bank policymaker

https://www.theguardian.com/business/2019/jul/12/n...

This would be epic, for me. Roll on no deal Brexit

[Nickbrapp]

For as long as there’s people in this country, houses prices won’t fluctuate much, brexit or no brexit. If the banks lending, people are buying

[I 8 a 4RE]

If you’re worried about increasing interest rates, why don’t you go for a 10 year fixed rate?

With 10% annual overpayment allowance, you should have it paid off in no time?

[Remster500]

Thanks for all the input.

I had concluded that there couldn’t possibly be a dramatic house price drop post Brexit as this would be catastrophic for UK Plc. Interest rate rises also need careful control for the same reason - even a drop to 0% to encourage growth.

Having not moved since 2004, I guess I’m just in unfamiliar water and being super cautious!

[Coolbanana]

Even in a worst-case Brexit scenario I really cannot see house prices crashing; a dip, stagnation in some areas yes, but no more. Maybe London would be hit a little but not dramatically. So buying for the long-term would be just fine I reckon, certainly a risk I'd be willing to take.

A bad Brexit will cause the BoE to batten down the hatches to protect folks from going belly up due to interest rate and mortgage risks - UK Plc can afford to do so if needs be while it weathers the inevitable storm that would ensue. Some folks will of course be casualties of Brexit in the form of job-losses, increased cost of living etc but it will be temporary and eventually overcome and everything will return to more or less normalcy again.

[red_slr]

bogie said:

So the nationwide chart shows true inflation adjusted house prices not back at 2008 peak levels ?

No because its 3 years out of date.

[red_slr]

[GR_TVR]

[Helicopter123]

GR_TVR said:

On that chart alone, house prices are relatively cheap at the moment, probably due to uncertainty and fear over Brexit.

We may all look back in a decade or so and conclude this was a great time to buy property.

[CSLM3CSL]

If in the event of a no deal brexit If Interest rates are dropped to 0% and there is a sharp fall in the currency attracting overseas buyers then prices could rise In nominal terms but drop in real terms.

[Condi]

Helicopter123 said:

On that chart alone, house prices are relatively cheap at the moment, probably due to uncertainty and fear over Brexit.

We may all look back in a decade or so and conclude this was a great time to buy property.

There is considerable differences between regions;

London prices are softening, especially at the top end, because people simply cant afford to pay the big money any more. Especially so with the likelihood of some jobs moving abroad subject Brexit.

Midlands and Northern region prices have been steadily increasing and are still doing so.

Scottish prices (outside of Edinburgh/Glasgow) in some areas are still below 2008 values, and have been stagnant for a few years now.

[The Moose]

GR_TVR said:

That trend line is BS. To start, it should be a straight line!

[Derek Chevalier]

Helicopter123 said:

GR_TVR said:

On that chart alone, house prices are relatively cheap at the moment, probably due to uncertainty and fear over Brexit.

We may all look back in a decade or so and conclude this was a great time to buy property.

The trendline was around 1.5% at the turn of the century IIRC (broadly in line with earnings growth as you would expect). We are still in an enormous bubble.