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Bank of England Warns UK House Prices 30% BrExit Crash!

Housing-Market / UK Housing Dec 01, 2018 - 07:59 AM GMT

By: Nadeem_Walayat

Housing-Market

This week saw the harbingers of the NO DEAL Brexit economic apocalypse set forth their forecasts of what awaited Britain following a No Deal exit from the European Union on the 29th of March. At the top of the doom merchants was the Canadian Governor of the Bank of England warning of a string of catastrophes for Britain where at the top of the doom list was a 30% CRASH in UK house prices. The following graph illustrates what the Bank of England's 30% crash in house prices would look like if it were to materialise post Brexit.


And here's a summary of all of the Bank of England's No Deal CRASH warnings.

  • Economic crash, GDP 8% drop
  • UK house prices 30% crash
  • Sterling 25% crash
  • Commercial property 50% crash
  • Unemployment soars to 7.5%
  • Inflation soars to 6.5%
  • Bank of England raises interest rates to 5.5%
And here's a summary of the of Government and Bank of England's GDP forecasts of what they expect to happen to the UK economy under various BrExit scenario's coupled with my own forecast as of Feb 2016.

UK House Prices Forecast

My 5 year house prices trend forecast published December 2013 is now nearing it's conclusion, ending on release of December 2018 data during early January 2019. Therefore in this series of analysis paves the way for my next multi-year UK house prices trend forecast that I aim to complete before the end of December 2018.

30 Dec 2013 - UK House Prices Forecast 2014 to 2018, The Debt Fuelled Election Boom

UK House Prices Forecast 2014 to 2018 - Conclusion

This forecast is based on the non seasonally adjusted Halifax House prices index that I have been tracking for over 25 years. The current house prices index for November 2013 is 174,671, with the starting point for the house prices forecast being my interim forecast as of July 2013 and its existing trend forecast into Mid 2014 of 187,000. Therefore this house prices forecast seeks to extend the existing forecast from Mid 2014 into the end of 2018 i.e. for 5 full years forward.

My concluding UK house prices forecast is for the Halifax NSA house prices index to target a trend to an average price of £270,600 by the end of 2018 which represents a 55% price rise on the most recent Halifax house prices data £174,671, that will make the the great bear market of 2008-2009 appear as a mere blip on the charts as the following forecast trend trajectory chart illustrates:

UK House Prices Forecast Current State

The most recent UK average house prices data for October 2018 (£227,702) is currently showing a 15% deviation against my original forecast trend trajectory which implies to expect a 14% reduction in terms of the long-term trend forecast for a +55% rise in average UK house prices by the end of 2018 i.e. a +41% rise. This is inline with my revised forecast expectations as of July 2017 (UK House Prices Momentum Crash Threatens Mini Bear Market 2017).

UK House Prices Momentum Forecast 2019

So is a NO DEAL 30% crash in UK house prices even possible let alone probable as the Bank of England forecasts?

UK house prices momentum analysis has first been made available to patrons who support my work.

For immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Nadeem Walayat

Copyright © 2005-2018 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be .

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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