BoE: Prepared for house prices to drop 33%

[BoEbrexit]

Wasn't sure whether to post this on property or here.

I'm a FTB and just saw the BoE stuff about being prepared for property price drop by up to 33% and massive interest rate rises.

I already knew that now is not the best time to buy, but I'm moving to a new area, and I might not be able to get a mortgage in a year or two due to work situation. I may move after four years or so, and was prepared for the fact I might sell at the same price, or slightly less...but one third less would be pretty destroying! (FYI, its not an expensive area, but not that much available, so prices seem to have stayed pretty stable over the years.)

My parents don't seen phased, saying I could just rent out and move into rented if in negative equity, like they did in the nineties.

Anyway, is anyone else panicking about this?!

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@bluntness

Which only comes into effect if there's a deal. This is incredibly basic. The transition period is conditional on a withdrawal agreement being signed. If there is no withdrawal agreement, there is no transition period. Google it.

www.bloomberg.com/news/articles/2018-07-24/what-no-deal-brexit-means-and-how-it-may-be-averted-quicktake

This is not going to happen. It's hysteria. The government can't afford for its housing bubble to be trashed and finance is ALWAYS about being pessimistic and it never usually turning out anywhere near as bad. We wouldn't proceed as we are if we thought this would happen.

Think of all the people the gov 'helped' onto the ladder with H2B, they'd all be absolutely screwed. People being in negative equity means everyone clings on for dear life and nobody sells. It does not mean houses are cheaper, available to buy and therefore everyone not on the ladder gets to hop on. I meant the market is stagnant in the east. There has been very little decent coming on for over 18 months now, decent offerings have been greatly reducing.

Sorry @BoEbrexit, I thought you'd bought already and were trading up. My bad.

This potentially puts you in a better position than someone who already has their money tied up in a UK property.

Thanks and that's interesting, it's just so unlikely we will simply exit with no deal and no transition period, the existing member states don't want that either, and countries like Germany and France hold a lot of sway.

What is for sure is a lot of hysteria, scaremongering going on, by both politicians and the media.

I'm not sure to be honest we will even exit, I could see it going to another vote and rhe country voting to stay in.

Oops wrong thread! Sorry.

House prices really don’t matter unless you have to move. It’s always been and will continue to be a gamble.
Buy a home. Ignore what is is “worth”. It is somewhere to live and investment shouldn’t come in to it!

To people who are saying that there will be no significant interest rises , is that based on our economy as it is now ? What would happen if the pound plummets or there is a significant recession ?

frumpety So are you suggesting if the economy tanks, the BOE would go against all previous times and up interest rates, I sure they only put it up so they can lower it if necessary.
As we sure the pound actually fell after last weeks rise, not helped by MC, I suppose once in his time as Gov he might get his forward guidance or prediction right, what an easy job hrs had. moved the rates twice in 10 years

frumpety
My views on future interest rate rises are based on the rates being offered by the UK government for fixed rate long term loans.

They expect to make a profit over 20 years on 2.5%

Interest rates on corporate debt on the tens of thousands of zombie companies are a critical factor in reducing the risk of a recession turning into a depression.

Carney is in a bind because he - like all sensible economists - thinks Brexit is barking, as do the Treasury.
But he has to play along with the battling wings of the Tory party and the ideas vacuum of the Labour party.

No Rosstac I am simply asking in what scenarios the BoE would need to raise interest rates, they have been much higher in the past, so something economy wise must have caused that ?

I am being lazy , don't have the energy to be arsed to Google it

The high interest rates I remember were to handle high inflation (23%. I remember) then it was like a yo-yo effect, up down, recession usually followed, but wages were linked to inflation and you got a pay rise every year without fell, the other time interest rates went up to 15% was due to the U.K. leaving the exchange rate mechanism after a run on the pound, I wish I had some savings then instead of a mortgage, these high rates were probably one of the reason there was not a lot of private rented houses about, made more money at the bank