That was according to Trevor Williams, professor at Derby University and independent economic consultant, who shared his views at yesterday’s MoneyLIVE retail banking conference in London.
In the case of a ‘no deal’ Brexit house prices could fall by 10-12% – though that drop could be mitigated with a significant policy reaction from the government.
That was according to Trevor Williams, professor at Derby University and independent economic consultant, who shared his views at yesterday’s MoneyLIVE retail banking conference in London.
Williams said: “House prices could fall by 10-12% in the case of a no deal Brexit with no policy reaction to it, though that is unlikely.
“A policy reaction would entail cutting interest rates towards zero, further quantitative easing, moves to relax some of the regulations around the market, for example removing the stamp duty threshold under a million pounds, other rules to ease the burden on those that have second homes, to encourage first-time buyers into the market.
“In that scenario that would limit house price falls across the country, though it would still mean there was a drop in London of 1-2%.”
He explained that these measures would have to be in place for a year in order to mitigate a fall in the value of the pound.
There would also need to be bilateral arrangements made to ensure medicines approved in Europe are approved automatically, as well as bilateral arrangements between port authorities.
He added: “My view is those things are in place. I think that the shock of the potential impact on supply chains is clearly going to hit investment spending in the short-term.
“What seems to have happened in the last year is consumers have dipped into their savings in order to maintain their spending.
“They are likely to cut their spending, which would lead to some slower economic growth and therefore this has a knock-on effect on consumer confidence.”
In terms of the negotiation between the government and the EU he said the best that can be hoped for is some kind of free trade deal.
However he implied that it’s unrealistic for the UK to get special treatment when it comes to freedom of movement, capital, labour and goods.
He said: “They can’t give access if the UK is not in the club.
“I find this whole debate sometimes very strange.”
