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The number of homes for sale has dropped to a decade low (lowest since the 2008 financial crisis). And property prices in London have dropped. The uncertainty

The number of homes for sale has dropped to a decade low (lowest since the 2008 financial crisis). And property prices in London have dropped. The uncertainty around Brexit means that people don't want to buy, nor do they want to sell at a loss until they're sure that they have to count it as a loss. There's a lack of liquidity. https://www.theguardian.com/business/2018/oct/05/uk-house-prices-fell-sharply-in-september-amid-brexit-wariness https://www.theguardian.com/business/2018/oct/05/uk-house-pr... Edit: As I point out in a comment below, if you're a foreign investor investing the day before the referendum, the exchange rate along means you lost 14% of your investment so far.

esotericn 8y ago
> nor do they want to sell at a loss until they're sure that they have to count it as a loss. I mentioned this as a possibility in my comment. Prices have not been adjusted because people don't actually believe, on the whole, that Brexit means anything material. > And property prices in London have dropped. By a low single digit percentage, last year, primarily at the top end of the market. If you're trading on leveraged derivatives that might be relevant. There are approximately zero actual individuals affected by a change of that magnitude. As I said, when we see real hard and fast falls, then I'll be interested. Right now it's just bluster on all sides. All talk, no action. I ask - politely - if you're going to reply with a nitpick, and state that actually it's 2%, or 3%, not 1%, or something - consider what this actually means. Brexit is being spoken about everywhere as some sort of hugely important world-breaking apocalyptic event, not a very slight adjustment over decades. The single largest contributor to quality of life for every single person I know is quality and availability of housing. Everything else is linked to that - we don't need food banks because people can't afford food, we need food banks because all the money disappeared into a rent hole first.
- tim333 8y ago
  >Prices have not been adjusted because people don't actually believe, on the whole, that Brexit means anything material I'm a London property owner who's pondered selling. Brexit will probably make a big difference but who knows how it's going to go just now. I'm going to sit it out and see but there could be a big fall with a no deal brexit. That said we survived WW1 and 2 so we'll survive a trade hiccup.
  - verbify 8y ago
    > we survived WW1 and 2 so we'll survive a trade hiccup. I don't understand this reasoning. We didn't all survive WW1 and 2. If you mean the union survived - the Republic of Ireland left the union shortly after WW1. And if Brexit isn't _as bad_ as the Blitz, surely that could still mean it's pretty awful.
  - esotericn 8y ago
    It's ultimately unclear to the that the London property market is linked to reality in a meaningful way so I think it's really hard to make predictions. The availability of credit is a big factor, and the 'step changes' in quality, etcetera. In the residential market I think it's quite easy to find Apartment B that is easily twice as good as Apartment A, but it doesn't cost twice as much because of the arbitrary steps introduced by lending criteria (e.g. if most buyers have approximately X income then there's a massive glut of apartments in the 4X-5X range). Renting is even more acute than that. But yes, I'm pretty tired of all of this 'end of the world' style posturing. In some ways I suppose it means we're all so comfortable now that we're able to spend time waffling on about abstractions like this.
- verbify 8y ago
  The prices haven't moved relative to the pound, which has dropped sharply. If you're a US investor, and you made an investment the day before the referendum, the exchange rate alone has seen you lose 14% of your investment. 14% is a large drop. The pound is at a historical prolonged low - except compared to the miners strike during 1984-5. But it's interesting how the markets did not predict that remain could lose: * On the 28th of May 2015, the EU referendum act was introduced. One pound in dollars was 1.46. * It came into force on the 1st of Feb 2016, one pound in dollars was 1.42. * On the 22nd of June 2016, the day before the referendum, one pound in dollars was 1.46 USD. * By the 30th of June 2016, one pound in dollars was at 1.33, and it's stayed around the 1.30 mark for a long time. * Right now it's only dropped to 1.28. So I ask you: If the markets foresaw the referendum (which the polls showed was always pretty close 51-49), why did the price of pounds not drop further before the referendum? Surely they knew there was a risk of 'leave' winning? Some people claim it was already 'priced in', however we can't see a significant drop between the legislation being announced, and the polls showing the election is close. The conclusion I draw is that the markets aren't rational. Until the 'apocalyptic event' happens, people don't believe it will happen. So that's why the pound didn't drop _before_ the referendum. Similarly, the pound will not drop before the UK drops out with no deal (despite it being a real possibility), because these things don't get priced-in in advance. However, if there is no deal, we should probably see very large market movements.
  - esotericn 8y ago
    > The conclusion I draw is that the markets aren't rational. Until the 'apocalyptic event' happens, people don't believe it will happen. I think that's a fair assessment. Perhaps no-one wants to be the first to move.
    - ben_w 8y ago
      From what I’ve read in various discussions, I think the general consensus amongst investors is that the worst case scenario is so utterly mind-boggling unbelievably horrifically apocalyptic that essentially none of them believe anyone could possibly let it happen. Either that or they see an angle to make money from it, but that’s a minority.
deleted 8y ago
[deleted]

esotericn 8y ago

> nor do they want to sell at a loss until they're sure that they have to count it as a loss. I mentioned this as a possibility in my comment. Prices have not been adjusted because people don't actually believe, on the whole, that Brexit means anything material. > And property prices in London have dropped. By a low single digit percentage, last year, primarily at the top end of the market. If you're trading on leveraged derivatives that might be relevant. There are approximately zero actual individuals affected by a change of that magnitude. As I said, when we see real hard and fast falls, then I'll be interested. Right now it's just bluster on all sides. All talk, no action. I ask - politely - if you're going to reply with a nitpick, and state that actually it's 2%, or 3%, not 1%, or something - consider what this actually means. Brexit is being spoken about everywhere as some sort of hugely important world-breaking apocalyptic event, not a very slight adjustment over decades. The single largest contributor to quality of life for every single person I know is quality and availability of housing. Everything else is linked to that - we don't need food banks because people can't afford food, we need food banks because all the money disappeared into a rent hole first.

tim333 8y ago
>Prices have not been adjusted because people don't actually believe, on the whole, that Brexit means anything material I'm a London property owner who's pondered selling. Brexit will probably make a big difference but who knows how it's going to go just now. I'm going to sit it out and see but there could be a big fall with a no deal brexit. That said we survived WW1 and 2 so we'll survive a trade hiccup.
- verbify 8y ago
  > we survived WW1 and 2 so we'll survive a trade hiccup. I don't understand this reasoning. We didn't all survive WW1 and 2. If you mean the union survived - the Republic of Ireland left the union shortly after WW1. And if Brexit isn't _as bad_ as the Blitz, surely that could still mean it's pretty awful.
- esotericn 8y ago
  It's ultimately unclear to the that the London property market is linked to reality in a meaningful way so I think it's really hard to make predictions. The availability of credit is a big factor, and the 'step changes' in quality, etcetera. In the residential market I think it's quite easy to find Apartment B that is easily twice as good as Apartment A, but it doesn't cost twice as much because of the arbitrary steps introduced by lending criteria (e.g. if most buyers have approximately X income then there's a massive glut of apartments in the 4X-5X range). Renting is even more acute than that. But yes, I'm pretty tired of all of this 'end of the world' style posturing. In some ways I suppose it means we're all so comfortable now that we're able to spend time waffling on about abstractions like this.
verbify 8y ago
The prices haven't moved relative to the pound, which has dropped sharply. If you're a US investor, and you made an investment the day before the referendum, the exchange rate alone has seen you lose 14% of your investment. 14% is a large drop. The pound is at a historical prolonged low - except compared to the miners strike during 1984-5. But it's interesting how the markets did not predict that remain could lose: * On the 28th of May 2015, the EU referendum act was introduced. One pound in dollars was 1.46. * It came into force on the 1st of Feb 2016, one pound in dollars was 1.42. * On the 22nd of June 2016, the day before the referendum, one pound in dollars was 1.46 USD. * By the 30th of June 2016, one pound in dollars was at 1.33, and it's stayed around the 1.30 mark for a long time. * Right now it's only dropped to 1.28. So I ask you: If the markets foresaw the referendum (which the polls showed was always pretty close 51-49), why did the price of pounds not drop further before the referendum? Surely they knew there was a risk of 'leave' winning? Some people claim it was already 'priced in', however we can't see a significant drop between the legislation being announced, and the polls showing the election is close. The conclusion I draw is that the markets aren't rational. Until the 'apocalyptic event' happens, people don't believe it will happen. So that's why the pound didn't drop _before_ the referendum. Similarly, the pound will not drop before the UK drops out with no deal (despite it being a real possibility), because these things don't get priced-in in advance. However, if there is no deal, we should probably see very large market movements.
- esotericn 8y ago
  > The conclusion I draw is that the markets aren't rational. Until the 'apocalyptic event' happens, people don't believe it will happen. I think that's a fair assessment. Perhaps no-one wants to be the first to move.
  - ben_w 8y ago
    From what I’ve read in various discussions, I think the general consensus amongst investors is that the worst case scenario is so utterly mind-boggling unbelievably horrifically apocalyptic that essentially none of them believe anyone could possibly let it happen. Either that or they see an angle to make money from it, but that’s a minority.

deleted 8y ago

[deleted]