2017 December 11 « Dr Alf's Blog

David Davis MP (Conservative). (Photo: Robert Sharp / English PEN) (Photo credit: Wikipedia)

Here’s a rather good blog from Oxford macro-economist, Simon Wren-Lewis.

Source: First Stage Reality and Brexiters – Mainly Macro – Simon Wren-Lewis

Wren-Lewis speculates that we’re headed for a very soft Brexit. For me, it’s too early to call. But I do agree with Wren-Lewis, don’t trust the political classes to explain the truth.

Look to hard-evidence and professional risk analysis not political chancers. The bottom line is that whether it’s a hard-Brexit or very soft Brexit, the economic costs will be enormous for generations and the gains will be nebulous in the extreme. The damage is done. Now we must look to the major political parties and how they sell the pup to the UK public. I fear Labour will have more credibility and apart from weaker property prices, highly leveraged UK consumers will need to bargain on eye-watering tax increases.

After all, did you see David Davis‘ eyes on the Andrew Marr show?

Thoughts?

Semi-detached houses in Croydon for sale (Photo credit: Wikipedia)

Here’s an excellent article from the Independent. London property prices are headed south.

Source: London property prices set to drop in 2018 – The Independent

The thing is, there will be winners and losers. It’s a no-brainer that the top-end of the residential market has taken a dim view of Brexit. But some estate agents dealing with the top-end are trying to argue that for the very big deals price is not a limiting factor. Would you believe an estate agent?

Londoners and those invested in London’s residential property need to look to the hard evidence. The evidence is highlighting a weakening market, with demand influenced by the fears of highly paid financial services staff that their jobs are going to Frankfurt and Paris. Let’s face it the Brexit referendum and Theresa May‘s weak leadership will be the trigger for the next UK property crash. We’re a long way from Margaret Thatcher’s sale of council homes – the current Conservative Government is the exclusive preserve of the very wealthy.

But remember there are opportunities in falling markets too. Like the sub-prime crash in the US, expect the weakest and the most highly geared to suffer the most financial damage, returning the keys to greedy lenders. Of course, it’s not just weakening property prices. We need to factor in the growth of credit card borrowing. Whilst Theresa’s May’s government continues to dream, expect radical intervention from the Bank of England.

Should we feel sympathy for over-extended London property borrowers?

Thoughts?