The recent vote for Brexit may damage the UK housing market and in turn banks. According to economists from HSBC the proportion of mortgage based accounts held by UK banks is over 60% making them vulnerable to interest rate rises and job losses involving mortgage payers. Falling GDP, as a result of the Brexit vote, may result in job losses and a falling housing market that could even result in a credit crunch, as experienced in 2008.
Key Takeaways:
- Britain could be forced into a credit crisis if Brexit plunges housing prices.
- Mortgages account for a huge percentage of overall bank lending.
- GDP could fall as much as 9.5% cumulatively in the coming years warns the Treasury — so things are not looking rosy.
“GDP could fall as much as 9.5% cumulatively in the coming years warns the Treasury — so things are not looking rosy.”