The UK housing market does well post the vote.Even the CBI cheers up a bit

Many commentators, stock market participants and surveyors have been warning us that housebuilding and the homes market will be badly damaged by the vote to leave the EU. We were told to expect an immediate shock to confidence, leading to falling purchases and plunging prices.

 

Yesterday a leading housebuilder, Persimmon, brought us up to date with their trading. In the first half year there was a 6% rise on the numbers of homes they sold, and a 6% rise in the average price of homes they sold, with good growth in revenue and profits.  Worries about the vote did not drag them down. Since the vote they tell us there has been a 20% increase in the number of visitors to their sites, and a 17% increase in reservations of homes by buyers. In other words, the very opposite of the gloomy forecasts has once again happened.

 

If this is the experience of one of the UK’s larger housebuilders, it is difficult to believe other housebuilders would have experienced the opposite. Persimmon are planning to increase the numbers of homes they build, as they foresee more demand ahead.

Would those who forecast the immediate shock and have said they think the housing market is falling like to comment? It is difficult to understand why the share market marked down housebuilders so savagely after the Brexit vote. They of course are busily revising their view and have marked housebuilding shares up again since.

Meanwhile we had another of those surveys which pessimists have welcomed to their cause. This one is a bit different. The CBI Industrial trends survey showed output expectations at a modest plus 11 compared to plus 6 in July. This implies rising industrial output over the third quarter of 2016.  Total orders were at -5 compared to -4 in July. These are often negative – they were at minus 18 in October last year for example, and negative for several other months long before the referendum became an influence.

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91 Comments

  1. Peter VAN LEEUWEN
    Posted August 24, 2016 at 5:24 am | Permalink

    With such good news why not travel down the A50 today? 🙂

    • Ian Wragg
      Posted August 24, 2016 at 7:03 am | Permalink

      Morning Peter, all this good news must be unnerving for the Brussels propaganda unit.
      My neighbour has been selling on average 3 houses each week.
      He tells me prices are at least 5% firmer than last year and he has sold his retail business to expand his estate agency.
      That is a real message of confidence.
      When are we going to get an update on Brexit and these vexatious challenges.

      • Lindsay McDougall
        Posted August 24, 2016 at 12:23 pm | Permalink

        Probably when we no longer have a pro-Remain PM, Chancellor and Governor of the BoE.

        Anyone up for cleansing the Augean stables? Perhaps UKIP still has a role.

      • Peter VAN LEEUWEN
        Posted August 24, 2016 at 12:51 pm | Permalink

        @Ian Wragg: Why unnerving? Everybody here likes you to get moving. 🙂
        I suppose that will be the same in Brussels.

      • John C.
        Posted August 24, 2016 at 6:34 pm | Permalink

        I imagine confidence is growing because people are realising that, despite the vote to leave, the issue is going to be fudged, and we are going to hang on in after all.
        And this is not an entirely satirical comment, either.

    • alan jutson
      Posted August 24, 2016 at 7:35 am | Permalink

      Peter

      Would love to but it would seem many of our politicians are away on holiday at the moment, and they are still working on the actual route planning.

      Do not worry its on the itinerary and we will get past the traffic lights, road works, traffic jams, and all of the other obstacles which are in the way, of course we could go a rather more direct route and simply fly direct which may save a considerable amount of time.

      Never know in time the A50 may become log jammed with traffic all going in the one direction.

      • Peter VAN LEEUWEN
        Posted August 24, 2016 at 12:56 pm | Permalink

        @alan jutson: With family in the Midlands I have often driven on hte (non metaphoric) A50. Pipe dreams about countries following Britain’s exit are a reminder of earlier hopes by eurosceptics of the EU or the euro unraveling. It’s not going to happen, as you’ll notice in due time.

        • Lindsay McDougall
          Posted August 24, 2016 at 5:23 pm | Permalink

          Let’s take one example. Italy’s GDP growth is reputed to have grown by an avarage of 0.2% per annum since the creation of the Euro.

          Italy is on a bankers’ ramp. Each year it is in primary budget surplus, but interest on its accumulated State debt takes it into deficit. As a result, each year its State debt to GDP ratio increases a little bit; it is now 130%.

          Explain to the typical Italian voter the advantages of staying in the Euro zone.

        • alan jutson
          Posted August 24, 2016 at 5:31 pm | Permalink

          Peter

          I have absolutely no interest in trying to encourage any other Country to leave the EU, that is entirely up to their citizens and politicians.

          I am just pleased we have decided to leave, I hope without too many arguments, but if push comes to shove, it will be what it will be.

          No one voted for Brexit in its many forms to many people, we simply voted to LEAVE.

          The ball is in the EU’s hands, I will be happy just to see us walk away with no agreement in place at all if your representatives try to be difficult with what you call the single market, which has really little to do with a market at all.

        • Richard1
          Posted August 24, 2016 at 7:23 pm | Permalink

          As Mervyn King, ex-Governor of the BoE & not a noted eurosceptic, said in his excellent book The End of Alchemy (I can recommend it): “the tragedy of the euro is not that it might collapse, but that it might continue…” Given the political emphasis on it.

    • Leslie Singleton
      Posted August 24, 2016 at 7:44 am | Permalink

      Very droll. Thought you had left so said Bye Bye last night.

      • Peter VAN LEEUWEN
        Posted August 24, 2016 at 12:57 pm | Permalink

        @Leslie Singleton: not quite yet . . .

    • Beecee
      Posted August 24, 2016 at 8:38 am | Permalink

      Yup – roadworks causing traffic delays unlike the EU which is a constant roadblock!

    • Anonymous
      Posted August 24, 2016 at 8:59 am | Permalink

      PvL: I take it your remark about the A50 has deeper meaning. I can’t find anything about it in my tabloid paper today, except news of a nasty crash.

  2. Lifelogic
    Posted August 24, 2016 at 5:29 am | Permalink

    Indeed we have nothing to fear from Brexit. The main fear is that Mrs May will not get us out and will turn out to be yet another broken compass like Cameron.

    We need a bonfire of red tape yet she is pushing through yet more: Workers on boards, quarterly reporting, gender pay gap reporting ………….. the indications so far are not good. The only real positives to date are vague hints about new grammar schools and the scrapping of Osborne’s absurd plans for more Mayors.

    • Lifelogic
      Posted August 24, 2016 at 6:51 am | Permalink

      Also the reconsideration of the absurdly expensive Hinkley Point C. It is clearly the wrong nuclear project.

    • fedupsoutherner
      Posted August 24, 2016 at 7:51 am | Permalink

      Yes, saw on the news this morning that Labour will vote against Brexit in Parliament. They will also over turn the vote if they get voted in at the next election (God help us) and give us another referendum in the hope we all vote to stay in. I am getting more concerned that we will never be able to leave. Cannot put into words how angry I will feel if our democratic vote is overturned.

      • Lifelogic
        Posted August 24, 2016 at 1:53 pm | Permalink

        My main concern is that Theresa May may well turn out to be another Heath, Major, Cameron disaster and will drag her feet & kitten heals on Brexit. As Norman Tebbit pointed out the forces for remain are still very considerable.

      • Sir Joe Soap
        Posted August 24, 2016 at 1:58 pm | Permalink

        If Labour are elected we will have more than the EU to worry about…
        Renew those UKIP memberships I guess is the best or only way.

        • John C.
          Posted August 24, 2016 at 6:38 pm | Permalink

          If Labour are elected, the country will not be worth saving.
          But it’s just not going to happen. There’s more chance of it totally disintegrating.

      • Cheshire Girl
        Posted August 24, 2016 at 4:34 pm | Permalink

        You wont be the only one who is angry. I predict serious trouble if the vote is overturned. As far as I’m concerned, the people have spoken, and that should be the end of it!

  3. Mark B
    Posted August 24, 2016 at 5:31 am | Permalink

    Good morning.

    Not much has changed because, post referendum, nothing has changes. And nothing will ever change until we leave.

    And on that note, how are the governments plans for leaving the EU going ? I think we are due a progress update, don’t you think ?

  4. Newmania
    Posted August 24, 2016 at 5:34 am | Permalink

    Would those who forecast the immediate shock and have said they think the housing market is falling like to comment?

    The immediate shock was the drop in the value of the sterling but what you have failed to take into account s that most households were expecting a 2% rise in interest rates over this year and the next. The swift action of the B of E saved the pound but the removal of this threat is a massive change in circumstances to the ordinary family budget in an economy that has not as yet delivered much in the way of pay rises since 2008.
    The down side of zero interest rates and a dropping currency is inflation but with the threat of recession that is not todays problem .

    IU stick to Mr Carneys rough and ready forecast that interest rates will have to be about 2% above equivalence on the economy and this will start to bite next year . From consumer confidence and especially mortgage confidence all else follows. Additionally demand has been pumped into the economy and deficit reduction dropped .

    A Corbyn / Mugabe / Redwood would look upon this with satisfaction no doubt but there is a cost and sadly it will kick in just as we get into the real consequences of Brexit

    Perhaps those who bitterly criticised Mr Carney would like to rethink his supoprt for Brexit at ouir long term cost??

    Reply Far from saving the pound, Mr Carney’s actions helped its fall. I opposed his cut to rates and his extra QE as needless. The Uk economy continues to grow, as it was pre Brexit. The so called Brexit shock has not hit consumption of housing in the way forecast.You are looking at the world upside down.

    • Richard1
      Posted August 24, 2016 at 7:33 pm | Permalink

      It is clear Brexit is to become like catastrophic global warming: it is axiomatic that it’s bad (happening in the case of GW), every time there’s any bad news it will be held up as a consequence of Brexit, if there isn’t bad news now maybe it will come next year – see above (there’s bound to be some eventually in any circs after all!). If there’s good news – as pointed out here – it will be discounted or ignored by such as Mr Newmania.

      Meanwhile Owen Smith calls for a new referendum since he doesn’t like the result of the last one. I suppose we could have one on the deal, but the democratic choice should then be between leaving the EU on whatever deal the govt gets and leaving the EU without a deal. After all, the electorate have already decided in principle to leave – now it’s just a question of when and how.

    • Anonymous
      Posted August 25, 2016 at 7:47 am | Permalink

      A typical London area (pro rata for many others in England):

      3 bed semi in cheap area – salary and deposit required £100k and £50k respectively to achieve 4x salary mortgage. Average salary in that area £39k. Oh dear.

      Newmania.

      What you will never admit is that the housing crisis was caused by EU membership and the increased competition to buy homes through freedom of movement. Yet you will be first to call a post Brexit reversion to the norm a ‘crash’ and then blame it on Brexit.

      Safely on the housing ladder, Newmania ?

      Kids in first choice schools, Newmania ?

      No problem finding a doctor, Newmania ?

      The Brexiteer’s “voted Leave because they didn’t like Polish plumbers” (as you said recently) is far more complex than you give them credit.

      • Anonymous
        Posted August 25, 2016 at 7:50 am | Permalink

        A post Brexit adjustment in the housing market will mean my kids feeling richer and you feeling poorer.

        What’s bad about that ?

  5. Mick
    Posted August 24, 2016 at 5:37 am | Permalink

    It’s funny how all these expert organisations and pundits are all back tracking now, have a word in Mrs Mays shell like and ask her implement article 50 now while the going is good, a little off topic
    http://www.express.co.uk/news/uk/703213/calais-knife-edge-9-000-british-bound-migrants-jungle-shanty-town-cross-channel-France
    I think it’s about time the boarder police were given assistance from the Army and harm our ports before its to late, we are at war with I.S. and they will use every trick in the book and more that the civilised world can think of

    • Anonymous
      Posted August 24, 2016 at 7:19 am | Permalink

      I didn’t know the police had anything to do with B&Bs.

    • Iain Gill
      Posted August 24, 2016 at 11:55 am | Permalink

      I dont think you realise how small our army is these days…

    • Stephen Henry
      Posted August 24, 2016 at 8:09 pm | Permalink

      We have a lot of skilled ex soldiers who are the right people to go into the border agency so why not use their expertise rather than civil servants who have as much experience as I have which is nil?

      • alan jutson
        Posted August 26, 2016 at 1:59 pm | Permalink

        Stephen

        “…Ex Soldiers….”

        A good point which any sensible politician would have suggested.

        Those who were facing Armed Service redundancy should be pointed in the direction of or border force.

        But then that is joined up thinking, which few in power seem to have.

  6. Lifelogic
    Posted August 24, 2016 at 5:38 am | Permalink

    Off topic rather I do find train gate rather hilarious. Corbyn clearly caught out doing his pathetic “I am sitting on the train floor look at me” PR photo op. Rather like Cameron’s hug a husky aren’t I very greencrap or his priority NHS in three letters.

    A real battle of the beards, Corbyn V Richard Branson.

    Certainly rather funnier than Owen Smith who now says he would to try to block the will of the large majority of voters who want out. This large majority despite the huge EU, government, Cameron, Osborne and BBC propaganda and slanted pitch for remain. With a government supporting leave and a level pitch it would be more like 2 to 1 for leave now. It does not sound like a sensible strategy for Owen to me.

    http://www.bbc.co.uk/news/uk-politics-37167253

    • Sir Joe Soap
      Posted August 24, 2016 at 2:00 pm | Permalink

      Yes, but people like Carney, Major, Blair, Ashdown are all playing into his hands. Maybe the lot of them should just join one party which we can then dump into the dustbin of history in 2020.

    • David Lister
      Posted August 24, 2016 at 5:21 pm | Permalink

      Lifelogic,

      You shouldn’t believe everything you read in the press. There is a bunch of passengers who were also sitting around him

      etc ed

    • Miami.mode
      Posted August 24, 2016 at 7:20 pm | Permalink

      LL. Lovely little piece in The Guardian online today where they sent a reporter on Jeremy Corbyn’s train who found plenty of seats plus quite a few journalists who were badgering normal travellers about their views on overcrowding. Don’t you just love the English?

      It would appear that Richard Branson’s release of the CCTV may have transgressed Data Protection. So are we now not allowed to prove what would appear to be a false accusation without the permission of the accuser?

  7. Lifelogic
    Posted August 24, 2016 at 6:04 am | Permalink

    The housing supply is still being limited by over restrictive planning, OTT building control regulations (full of greencrap lunacy), but above all by the lack of competition and misguided over regulation of banking. Banks are charging far too much and lending rather too little as a proportion of the land values and build costs.

    • Lifelogic
      Posted August 24, 2016 at 7:33 am | Permalink

      Property supply is further restricted by Osborne’s absurdly high stamp duty rates which deter people from moving, decrease job mobility and is yet another cost to builders, end users and property developers.

  8. Denis Cooper
    Posted August 24, 2016 at 6:15 am | Permalink

    It’s impossible to be sure exactly what is going on, beyond the obvious fact that so far there has been no catastrophic economic and financial shock. Whether this is because people have woken up to the daytime reality rather continuing to being terrified by the nightmares sent to them by the Remainders, or many of them suspect that in the end we won’t be leaving the EU, or we will only leave the EU in theory and not in practice, is hard to tell.

    Reply People did not believe the scare stories and they were not true!

    • Dennis
      Posted August 24, 2016 at 11:47 am | Permalink

      The scare story that the £ would fall has been vindicated.

      • Roy Grainger
        Posted August 24, 2016 at 5:26 pm | Permalink

        Except the pound falling is a good thing, the Japanese have been trying to engineer a similar fall in their currency for years.

      • Sir Joe Soap
        Posted August 24, 2016 at 6:07 pm | Permalink

        It’s one of the few things that Carney and the BOE can have direct influence over. If you’re Governor of the BOE and tell people including your mates at GS you’re taking action to make the Pound fall, then do it, it probably will fall in the short term. Remember the deluded “genius” Brown telling the gold market that he was about to sell our gold reserves?

      • getahead
        Posted August 24, 2016 at 7:05 pm | Permalink

        What is scary about a fall in the value of sterling?

  9. Richard1
    Posted August 24, 2016 at 6:18 am | Permalink

    Surely the greatest threat by far to the UK economy is the election of a Labour government, either under the far left Jeremy Corbyn – whom traingate reveals to be a dishonest humbug (and an incompetent one, having been caught out), or the fatuous other leftist Owen Smith?

    • Lifelogic
      Posted August 24, 2016 at 6:59 am | Permalink

      Indeed, both want to nationalise the trains (I assume this is just a euphemism for purloin). Owen even wants to ignore the voters over Brexit and to have “equality of outcome” so clearly they are both bonkers on the economy. I do not think they are much of a threat as they will not get in. Unless that is T May turn out to be just as dire as Heath, Major & Cameron. Hopefully she has learned the lessons from their dreadful records.

    • Mark B
      Posted August 24, 2016 at 7:21 am | Permalink

      Which might well happen if the Conservatives (sic) do not get a move on regarding BREXIT.

      Remember, Corbyn is a known Euroscprtic. If anyone, other than Farage and UKIP are going to get the UK out of the EU, it will be him and Labour.

    • Lifelogic
      Posted August 24, 2016 at 8:56 am | Permalink

      “a dishonest humbug” – is that not part of the job description for a leader of a political party? Especially one one pushing the evil “politics of envy” and proposing the theft of or devaluation of other companies or people’s assets.

      • Richard1
        Posted August 24, 2016 at 1:59 pm | Permalink

        Well I suppose in theory you don’t have to be either dishonest or a humbug to be a far leftist – although clearly you do need to be either ignorant of or in denial of the facts of history which present a huge weight of evidence to show what a disaster socialism is wherever and whenever its been tried (Venezuala today being a current example).

        Mr Corbyn however has shown himself to be both dishonest and a humbug through this episode – where he has (incompetently needless to say) – attempted to spin a false story about how empty his train was.

        • eeyore
          Posted August 24, 2016 at 6:15 pm | Permalink

          All parties have vices. Hypocrisy has always been the Labour vice, greed the Tory one. Shameless priggery is at home all across the Left but Mr Corbyn is making a strong bid to monopolise it for socialism with his outstanding personal example. We voters should be tolerant of these modest foibles; they just come with the turf in democracy.

        • John C.
          Posted August 24, 2016 at 6:45 pm | Permalink

          Had it BEEN empty, he would have had a case to argue that it was being run inefficiently, or was too expensive, or too slow, or just too unpleasant. There’s always an opportunity for a politician to make hay, but Corbyn is not even a good politician, as well as being hopelessly misguided.

  10. agricola
    Posted August 24, 2016 at 6:40 am | Permalink

    Encouraging though it is to hear modestly good news, and to receive confirmation that the opposite put out by Remain was no more than gross Goebbelian propaganda, I would like to know what form Brexit is planned and whether it conforms with the aspirations of those who voted Leave.

    The World does not stop because Parliament goes off on an extended holiday. It has now been two months since the vote and the rather bland statement from your leader that leave means leave. It was our decision, we need to know what is being planned in our name. We the British people are not mushrooms to be left in the dark and fed the inevitable.

    • brian
      Posted August 24, 2016 at 7:22 am | Permalink

      I suspect that those who voted to Leave did not have a universal view of a form of Brexit.

      • alan jutson
        Posted August 24, 2016 at 1:58 pm | Permalink

        Brian

        We did not vote for Brexit in any of its forms

        We voted to LEAVE as that was the question on the ballot paper

    • Lifelogic
      Posted August 24, 2016 at 7:35 am | Permalink

      Indeed why is May doing so little other than pole walking in Switzerland and basking in the reflected Olympic success? Get on with it.

      • MickN
        Posted August 24, 2016 at 12:21 pm | Permalink

        ….and it is costing us over a billion pounds for every month that our leaving is delayed

    • Roy Grainger
      Posted August 24, 2016 at 10:30 am | Permalink

      When negotiating with hostile forces like the EU Commission it is very unwise to brief out your position in advance, except possibly with false information as the EU is doing (ie “no special deal for UK”). We just have to put our faith in David Davies at this point. I too doubt Mrs May’s Brexit credentials but I find the silence from her on this and all other policy areas quite refreshing really.

    • Richard Butler
      Posted August 24, 2016 at 10:38 am | Permalink

      It’s a big task with many stake holders, it’s probably sensible not to rush out ‘the plan’ too fast, and keep your gun powder dry until the negotiating table, although I would like a stronger signal of intent (Brexit means Brexit is a bit light weight and amorphous).

      The overarching vision is quite simple; Lots of non EU nations trade huge amounts into the EU without having to accept conditionality (aside from local standards as is the case with all trade). One way or another as a very important market to key EU nations, and the one providing deep capital to enable EU trade, a good deal will be arranged. The last thing the wobbly EU needs is hampering of trade.

      We hold plenty of aces when it comes to the negotiation to include our meaningful projection of military power, our world class intelligence gathering, our global soft power reach (which can only increase now), deepening strategic leverage (much of the Commonwealth is right in Chinas backyard), our nuclear umbrella, our fishing grounds and far more besides.

      Liberal Bremoaners claim to own the facts and turn ignorance into enlightenment, and yet the very opposite is the case when it comes to understanding the huge prosperity and influence potential to be enabled by Brexit.

    • Mark Watson
      Posted August 24, 2016 at 11:03 am | Permalink

      On the contrary, it’s nice to have a PM and Chancellor who,unlike the previous pair,don’t feel the need to come on the media every other day and push another half baked initiative aimed at scoring political points and self promotion.
      Less government please, and let us, the people, get on with it.

      • Sir Joe Soap
        Posted August 24, 2016 at 6:09 pm | Permalink

        Indeed.

  11. DaveM
    Posted August 24, 2016 at 6:54 am | Permalink

    You keep giving us good news stories Mr Redwood, but the real good news story 17+ million of us would like to hear is that we have left the EU in accordance with the democratic will of the electorate and the manifesto upon which your party was elected (ie to honour the result whatever it was). When is this going to happen please?

    Reply I want it to be soon and have set out how we could do it. We are awaiting the government’s decision.

  12. Iain Moore
    Posted August 24, 2016 at 7:02 am | Permalink

    It is worrying that an organisation which claims to represent business is such a glass half empty organisation. When we need them to be chaffing at the bit to conquer the world, we have a bunch of Eeyores.

    • eeyore
      Posted August 24, 2016 at 6:28 pm | Permalink

      Lions led by donkeys.

  13. Antisthenes
    Posted August 24, 2016 at 7:32 am | Permalink

    There is no doubt that remainers made very big miscalculations. They were wrong on forecasts and they were wrong on how the public would perceive them. Then they were wrong to try and make them true after they lost. They are still wrong to try and stigmatise Brexit at every opportunity. Anyone person or organisation with power and influence who actively campaigned to remain or sided with that campaign have shown themselves to be dishonest and their opinions should never be trusted. By my calculation 80% (proving Paretto’s law right again) of the establishment and the MSM are not fit for purpose. When it comes to decision making the rule should be think hard and long about following what the majority advises as they are rarely right.

    The real reason that house prices are continuing to rise is QE, low interest rates and government incentives. Nothing to do with Brexit at all one way or the other. It is the perfect example of malinvestment and where some of the inflationary forces of money printing ends up. PQE of course would show up on the high street which the idiot left frequently urge us to employ.

    The only useful effect of rising house prices is that it encourages builders to build many more homes quickly. However there are a considerable number of downsides. Home ownership becomes increasingly out of reach, capital is being diverted away from better use of it, it is masking the true state of the countries economy and it is building up another asset bubble that one day will burst and cause the next bust.

  14. alan jutson
    Posted August 24, 2016 at 7:41 am | Permalink

    As you know well John, there is a huge amount of building is going on in and around Wokingham, indeed some sites do not have any show homes to view such is the demand, they are all selling off plan and once completed people are moving in immediately.

    Local site (National Builder), smallest 4 bed house £665,000, must exchange within 28 days, and if you have something to sell first they are not even interested in talking to you.

    It will all end in tears eventually, it will be nothing to do with Brexit, but rising interest rates which will cause no end of financial suffering for many.

    • Sir Joe Soap
      Posted August 24, 2016 at 2:03 pm | Permalink

      Sorry but the bad news is interest rates won’t rise. There will be an hyperinflationary reset before that happens.

      • alan jutson
        Posted August 24, 2016 at 5:32 pm | Permalink

        Sir Joe Soap

        Interest rates will rise, rest assured, its just a question of when. !

  15. fedupsoutherner
    Posted August 24, 2016 at 7:52 am | Permalink

    I am sure the housing market is doing well down in England John but in certain parts of Scotland it is stagnant, particularly if you happen to be unlucky enough to live near a major wind farm. No compensation so hard luck when and if you are able to sell.

  16. Iain Gill
    Posted August 24, 2016 at 8:18 am | Permalink

    I am not sure ever increasing house prices, based on constant government manipulation, extreme low interest rates, out of control immigration, necessity to buy a house to avoid the failing school catchment areas of the large public housing estates, and so on is a good news story?
    As for Brexit, all I see is inertia in the ruling classes and an indication from our public sector and senior politicians that they are going to do their best to make leaving the EU look and feel like staying in the EU as much as possible. Exit in name only.

    • acorn
      Posted August 24, 2016 at 4:55 pm | Permalink

      Frankly, building a Brexit economy, on the basis of large quantities of fixed capital formation in a non-productive asset class (residential housing), is not the brightest idea around.

      But, if you see the UK as one very large, for sale to any global bandit, private housing estate, surrounded by a defensive moat, then OK. I am sure we will all be able to get jobs as gardeners; painters, waste collectors; road sweepers etc etc.

  17. Denis Cooper
    Posted August 24, 2016 at 8:26 am | Permalink

    Off-topic:

    https://euobserver.com/tickers/134728

    “UK must vote again on Brexit, says Labour contender Smith”

    “UK Labour leadership hopeful Owen Smith says prime minister Theresa May must commit to another public vote on the country’s withdrawal from the EU. “The British people were lied to by the ‘Leave’ campaign: they deserve to have a say on whatever exit deal the Tories strike with the EU,” Smith said on Wednesday. If elected Labour leader, he would oppose any move to invoke article 50 without this commitment.”

    It isn’t clear exactly how he would endow that commitment with any legal force.

    It’s a funny old world where it would be better for a country if one of its major political parties was led by an incompetent maverick left wing extremist …

  18. Anonymous
    Posted August 24, 2016 at 8:38 am | Permalink

    This mood could be influenced by the fact that Brexit is by no means a sure thing:

    – We are still in the EU

    – It seems less and less likely that we will actually leave it

    Owen Smith now says a second referendum must be taken.

  19. Chris S
    Posted August 24, 2016 at 8:58 am | Permalink

    Everyone seems to be cheering up a bit – except that Welshman who’s standing against Corbyn, obviously. He was still broadcasting doom and gloom about the Brexit “disaster” on the Today programme this morning.

    Can’t remember his name……………….and after the leadership election neither will Labour supporters either !

  20. bigneil
    Posted August 24, 2016 at 9:14 am | Permalink

    There are estates, being built virtually everywhere around my small town. It will soon be a very big town. The A road which had a good flow of traffic along it is at a virtual standstill during the so-called rush hours. Adding thousands of houses and therefore thousands more cars to the locality is going to cause mayhem. Inevitably there will eventually be a by-pass built – which will then invite an industrial estate to be built. I’m glad I’m old as soon I will only be able to see roads houses and factories.
    As for all the new housing – who will be living in them? – all the ( out-breeding us ) asylum seekers and refugees? The working class taxpayer already has to choose between having children and buying a house for themselves, while the government ensures the taxes paid by them goes to housing those who come here with their hands out, contribute nothing, and breed for more cash from the system. As said – glad I’m old.
    Want to see the England of the future? – look at the countries where all our replacement population are coming from, look at the state they are in now. Not a great outlook for us is it?

  21. Denis Cooper
    Posted August 24, 2016 at 9:18 am | Permalink

    Continuing off-topic, Owen Smith’s Today interview with (a surprisingly critical) John Humphrys is embedded in this article:

    http://blogs.spectator.co.uk/2016/08/owen-smith-makes-foolish-pledge-block-brexit/

    The fundamental flaw in his thinking comes out at about 1 minute 25 seconds, and then again at 1 minute 59 seconds, and again at 2 minute 58 seconds, and again at 5 minutes 5 seconds, when he implicitly assumes that having told the other countries that we intend to leave the EU, and thereby compelled them to spend time and effort on the negotiation of new arrangements, and having got a new set of arrangement hammered out between all twenty eight countries, we the British people could then reject those proposals in a referendum and everybody else would be willing to stay where we are now, almost as if neither of the two referendums had ever happened.

    I can’t see that it could possibly work out like that: even before we have put in the Article 50 notice saying that we intend to leave the EU the leaders of the other EU countries are already proceeding on the assumption that we will be leaving, and it seems very unlikely that having taken them right through the withdrawal process they would be prepared to accept that it was all a mistake from the start and on second thoughts we would prefer to stay in on the terms which presently apply.

    • Roy Grainger
      Posted August 24, 2016 at 5:31 pm | Permalink

      Smith’s position is incoherent. He says Brexit may mean that workers’ rights are removed. But surely all that needs to happen post-Brexit is a Labor government needs to be elected then he can impose any workers’ rights he wants. Or maybe he’s assuming Labour will never be elected again so the EU have to impose his policies ?

      • Sir Joe Soap
        Posted August 25, 2016 at 10:05 pm | Permalink

        Yes, but if Labour doesn’t get elected he has no influence to keep us in the EU anyway. Welsh logic.

  22. Bert Young
    Posted August 24, 2016 at 9:39 am | Permalink

    Summer months are traditionally “slow” in the property market ; houses in my area are moving and have shown no indication of price fall . My property developer friend expects things to be entirely “back to normal” in September .

    The CBI does seem to be coming off its pre-Brexit perch but I have never respected this source as a reliable indicator of our economy .

    Owen Smith seems to feel that a democratic vote means nothing ; this would put Labour in a very untrustworthy position if they ever regained power . I would now like to see a robust statement from the Conservatives putting them in their place . Equally the latest figures for Scotland’s negative figures – showing an extra cost of £1,200 per head more than England , show just how dependent they are on us .

    I am pleased to note the detailed knowledge PvL has of our road network . He probably knows how bad the M25 can be as an inter-connection to the Channel Ports !.

  23. Ian Wragg
    Posted August 24, 2016 at 9:48 am | Permalink

    Looking back on some old saved posts it is interesting that PvL has changed the format for his name.
    Could this be a replacement as the original has been sacked after the Brexit vote.

  24. ian
    Posted August 24, 2016 at 9:54 am | Permalink

    It just go to show that parliament and it friends are against the person in the street.

  25. CHRISTOPHER HOUSTON
    Posted August 24, 2016 at 10:00 am | Permalink

    British institutions cannot clue what’s one step around the corner. The media should stop trying making fun of them by asking their opinion. They are an old joke.

  26. Richard Butler
    Posted August 24, 2016 at 10:29 am | Permalink

    Arrogant, liberal Bremoaners like to frame themselves as progressives and yet the most potent citizen lead revolution for a generation passes them by as they desperately try to cling to the establishment status quo. Brexit is a progressive, globally orienting, courageous evolution in the British journey.

    The British Tiger economy is beginning to roar as many of us predicted. It was always utterly ludicrous to image mutually beneficial trading arrangements with the EU would not be established, of course they will, and in the meantime we’re re-positioning as the nimble, global Tiger in the west, and even more a safe haven for investors compared with the lumbering EU zombie.

  27. CHRISTOPHER HOUSTON
    Posted August 24, 2016 at 11:01 am | Permalink

    It is a matter for the shareholders of Persimmon if they wish to continue with a management which so badly got it wrong about the company’s prospects pre June 23rd and whether such a management is competent to take the company forward where business investment decisions need to be made free from economic-social-political prejudice and heresay. One cannot always bank on the momentum, even of population growth, even of necessary building, to sustain a company where competitors have bright heads and may resist takeovers of their companies by a less assiduous but wealthier rival.

    As to the CBI. No one of any account has ever taken their opinion as important.

    Reply Persimmon management delivered good results!

  28. ian
    Posted August 24, 2016 at 12:12 pm | Permalink

    Nobody seems to care about workers pensions which have been hit again by QE and lower interest rates, with 60% of companies now owned by overseas companies who do not like paying money into their british workers pension funds with some british companies, debt on companies pension 1.1 trillion, nearly the same as the country debt without QE 1.2 trillion with companies trying to lobby parliament for tax payers to take over companies pension so they can pay all of the money to shareholders, as the companies always win in parliament should the people just acknowledge this and move on to a poor retirement.

  29. Lindsay McDougall
    Posted August 24, 2016 at 12:20 pm | Permalink

    More houses built and sold is unreservedly a good thing, because it increases supply. But how to reduce demand? Immigration control and steadily rising interest rates will do the trick.

    We shouldn’t worry if house prices slowly fall relative to wages and salaries, just so long as mortgage holders do not have significant negative equity. A more subtle Governor of the BoE could make it happen.

  30. David Lister
    Posted August 24, 2016 at 12:30 pm | Permalink

    I suspect that the difference was that before the Referendum vote, there was the expectation that in the event of Leave being successful that Article 50 would have been triggered and moves made to leave the EU would have happened quickly.

    Since the Referendum, it is clear that in the absence of a clear Vote Leave plan and the apparent complexity of Leaving being much greater than was disclosed before the Referendum that most people now expect that leaving the EU won’t happen for many, many years. If at all.

    The more the positive news keeps coming, the less reason there will be to accelerate a departure from the EU and so it becomes self-fulfilling.

    • Roy Grainger
      Posted August 24, 2016 at 5:35 pm | Permalink

      How could Vote Leave have had a “plan” when they weren’t the government and so could not implement it ? Cameron promised to implement the decision but that turned out to be a lie.

    • ABC
      Posted August 26, 2016 at 7:56 pm | Permalink

      Oh please don’t let that be true. I have faith in the JRs of the political world to use their intellect to sort this. 98% may be weak and after the money, prestige, power usw but I know there are 2% with brains and integrity who WILL finish this and win.

  31. ian
    Posted August 24, 2016 at 1:07 pm | Permalink

    Should not parliament be lobbying companies to fill up their workers pension funds instead of the other way round, when is parliament going to put the people first, should not parliament be making laws to see that workers pension funds come first instead of maybe.

    If they cannot fill their pension funds for the people that earn them the money to hand out elsewhere, what does that say about the people running those companies.

  32. Sir Joe Soap
    Posted August 24, 2016 at 2:13 pm | Permalink

    I have to say Persimmon took absolutely the correct stance, from April:

    Other advisers who did not sign included Jeff Fairburn, who runs housebuilder Persimmon,…
    A spokesman for Persimmon Homes said: “We have thousands of employees and customers and no doubt there are strong opinions on both sides. The board has discussed it, and Persimmon has decided to remain firmly neutral.”

    As always the basket case RBS is on the wrong side of history:

    Offering a personal view, Royal Bank of Scotland chief executive Ross McEwan said: “I can’t see an economic scenario where coming out of the EU is a good thing for the bank or the banking industry as a whole in the short to medium term.”

  33. Margaret
    Posted August 24, 2016 at 3:45 pm | Permalink

    We do not want house prices to shoot up, but also not lose value . A wage rise after 5 years would also be helpful as I suppose it would be to all. I am still in the process of extending my little hovel bought post liquidation of my business with 100 % mortgage, but would like a small square detached box to while away my dotage in a couple of years . The price of houses are usually relative to each other from the initial purchase and taking into consideration improvements. We oldies still need houses and pensions are not like they used to be.
    Unfortunately all want to take a profit out of you and they will do this by all means. Trying to argue a salient point with anyone these days is hopeless as they will refuse to take your point and argue a parallel point to get themselves out of trouble when it is obvious they are trying to squeeze money out of you and have made a mistake. This makes any purchase, particularly house buying ,difficult for fear of being conned. What used to be a lawyers tactic by refusing to address the central point and pussy footing around peripheral issues is now commonplace. They are either deliberately obtuse or just thick. These matters, one may think, go off in a tangent but consider them in all the paper work , policies and other financial matters when buying a house and it goes far beyond simply building houses.

  34. Christopher Hudson
    Posted August 24, 2016 at 7:17 pm | Permalink
  35. Anonymous
    Posted August 25, 2016 at 6:57 am | Permalink

    As with the Olympics it is dodgy to tie the housing market to Brexit.

    The housing market is not “doing well” it is in a perilous state.

    A cheap area in London requires a family to be on £100k a year with a £50k deposit to by a small 3-bed semi. The median family income in that area a meagre £39k.

    Something has to give and soon. Brexit will cop the blame – though the ensuing crash will actually have little to do with it.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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