How seriously should we take warnings that prices could fall by a third or more?

It goes without saying that we are in a period of extreme uncertainty. The main cause, of course, is Brexit, and the question of whether Britain can achieve an amicable divorce with the EU or whether such hopes disappeared with the end of Theresa May’s premiership.

Then there is the risk of a hard-left Labour government. It is hard to imagine the Labour leader in a rugby shirt but, as our new premier Boris Johnson once put it, Jeremy Corbyn is indeed waiting for the ball to come out of the back of the scrum if the Tories and the Brexit Party succeed in dragging each other down.

What does all this mean for property? Is there a safe haven to be found in bricks and mortar? Or is property in the line of fire, highly vulnerable when the cold winds really start to gust? It is an intriguing question. 

Property professionals have had one or two reasons to curse Mark Carney, the outgoing Bank of England governor, in recent years. Sometimes it has been because of his warnings of imminent interest rate hikes, most of which came to nothing. Of late it has mainly been because of the Bank’s no-deal Brexit warnings. When news first emerged of the governor’s warnings to the May Cabinet last year, which included a fall of more than a third in house prices, most people thought this too fantastical to be true. But the Bank was required by the House of Commons Treasury committee to publish these warnings, and the house price fall was in there. Cue a collective banging of heads on desks in estate agents’ offices across the country.

Headlines are dangerous, not least those relating to house prices; they need to be set in context. The context for that dramatic house prices headline was that this was one of the elements of the latest stress test the Bank of England had set for the banks. It included, as well as that big fall in house prices, its likely causes: a rise in official interest rates to 4% and a large increase in unemployment.