Mark Carney, the governor of the Bank of England, grabbed the headlines recently when it was reported that he had told the government in a meeting that a so-called “no deal” Brexit could slash house prices by up to 35%.
It came in the same week as the CEO of Jaguar warned that a “no deal” Brexit scenario would likely mean that the company would have to vacate the UK and find somewhere where it’s production line and supply chain isn’t likely to be disrupted.
However, this situation is a worst-case scenario according to Carney himself.
He said: “That’s not a prediction of what is going to happen, we have been working on making sure that those institutions that we continue to supervise [the banks], they’re prepared for all potential contingencies. Central to that has been stress-testing those institutions to severe outcomes, that is what you need to do in order to make sure that in the better states of the world that the [banking] system is very clearly and transparently ready for [a harsh scenario] and able to continue to lend.”
The reality then is that any type of housing crash or crisis remains extremely unlikely, especially as there are signs that the North and North West of England are rapidly becoming the property hot spots of the UK.
Areas in Manchester, Sheffield and the East Midlands have been experiencing significant growth recently, as well as areas of the South East and South West such as Kent and Bristol. It would have to be a fairly catastrophic scenario to halt and reverse this trend, and the overwhelming likelihood is that it won’t.
As with any coverage with regards to Brexit, the housing market and the economy, it’s best to treat stories such as these through the prism of vision of the paper that’s printing it. It’s likely that the more left-leaning publications are going to treat such an announcement as apocalyptic whilst the more conservative publications are likely to treat it as though it’s nothing.
The truth will lie somewhere in the middle. Those predicting doom are very likely to be proved wrong whilst those proclaiming everything to be fine are incorrect not to at least be cautious, but the truth, as it stands, is that the housing market is in a healthy position and that’s not likely to change.