Friends don't let friends stay in something as stupid as the EU - Credit, public domain

It’s possibly true that we don’t want a cliff edge drop in house prices. Possibly. But it is a general thought across varied policy makers that UK house prices are too, too, high and that something ought to be done to lower them. Then we’ve Mark Carney telling us that Brexit might cause a 35% fall in house prices. This is being said to turn the Daily Mail constituency determinedly against the very idea of leaving the EU of course. But given that it achieves what it is said must be achieved this looks like an argument in favour of Brexit, doesn’t it?

The Bank of England’s governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.

The problem with this being?

Mark Carney briefed Theresa May and senior ministers on the Bank’s planning for a “cliff-edge” break with the EU at a special Cabinet meeting on Thursday to review the Government’s no-deal preparations.

It is understood he warned house prices could fall by up to 35% over three years in a worst-case scenario, as sterling plummeted and the Bank was forced to push up interest rates.

Well, yes, rising interest rates would take the steam out of a house price boom.

According to reports, he compared the fall-out from such a chaotic departure to the 2008 global financial crash.

Ministers were said to have listened in silence as he and Chancellor Philip Hammond spelled out the grim consequences for the economy.

Two Remainers scaring the Bejabbers out of the Cabinet then.

But think of this on that larger scale. The entire Labour Party insists that we’ve got to do something about the cost of housing. Near every NGO – especially the likes of Shelter etc – insists that the lack of affordable housing is our biggest economic and social problem. Brexit will make all housing more affordable, this is a good idea then, isn’t it?

We should therefore see Shelter, all those NGOs, the Labour Party and the concerned and progressive of all types now switching to supporting Brexit therefore. And will we? Ah, no, that would be to expect consistency in politics – but it still ought to happen, no?

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No, wait, sterling is going to plummet, but house prices (in sterling) are going to plummet 35% faster?

Ministers were silent because this guy was pulling numbers out of a bodily orifice, so what is there to add? The economic shock/collapse was predicted just after a Brexit vote, and as this didn’t happen, it is predicted just after a Brexit implementation. Over three years. They have no idea. But you knew that.

Quentin Vole
Quentin Vole

AIUI Carney was simply quoting the most extreme stress test that UK banks have to pass to ensure that they are resilient to various worst case scenarios – he wasn’t arguing for what he thought would be the result of Brexit on WTO terms. But that isn’t how it’s been reported in the MSM.


PS — Policy decisions should not be made on the basis that prices are going to change in this direction that suits me. Immigration policy should not be set to bolster manufacturing wages, or on the other hand to provide access to low-cost engineers. Just do what’s right.

Rhoda Klapp
Rhoda Klapp

If housing isn’t affordable, who’s that living in all the houses?

(I never thought of house prices at all when I voted leave.)


Before the referendum people were screaming blue murder that Brexit would result in wages going up and house prices going down. Had me sold.