Bank of England governor Mark Carney says a no-deal Brexit exit could lead to a 35 per cent house price crash.
The scenario is one of three for the wider economy painted by Carney in a presentation to government ministers yesterday.
The worst case scenario would see Britain go into recession, a slump in the value of the pound and a crash in house prices - down 35 per cent over three years.
One newspaper this morning says that Carney also warned that the no-deal chaos could be as damaging to the wider economy as the 2008 financial crisis.
Political commentators briefed on the presentation say Carney’s comments were received "respectfully" by members of the Cabinet who were present - but not everyone in the agency industry felt the same way.
When news broke of the worst-case scenario last evening, Emoov founder Russell Quirk tweeted: “Mark Carney is the most dangerous man in Britain and needs to shut up spouting this crap. Between him and the Archbishop of Canterbury they both need to leave politics to the politicians.”
However, the lead economist of the official Leave campaign in the EU referendum - Andrew Lilico - also took to Twitter to say: "35 per cent is the standard [real terms] fall in UK house price downturns. That's what happened in 2007-2011, 1990-94, and 1978-81."
The kerfuffle over Carney's analysis came shortly after the chief executive of the Haart estate agency chain said the political and economic uncertainties surrounding Brexit had not stopped a major improvement in its business performance.
Paul Smith said his firm’s transactions across England and Wales up 10 per cent in the past month to their highest level since November 2016. There was also an annual increase of 19 per cent in buyers entering the market in London.
“For over two years we’ve been listening to bold claims from commentators and public figures about the impact that Brexit will have on the housing market, but what we are seeing on the ground is proving them otherwise” said Smith.
“Even the formerly sluggish London market is starting to make a u-tum. House prices are down slightly on the month and are flat on the year, but transactions have jumped 15 per cent on the month” he adds.
“With 20 buyers chasing every property on the market in London, it is clear that it is a lack of stock that is really holding the market back from reaching its full potential.”
Smith’s claims were significantly more upbeat than most other agents but he admits there is a continuing fall in the number of buy to let purchases - although Smith says rents in London are up five per cent over the past year.
“But the market is not without its flaws. The government needs to re-double its efforts to increase housing stock, and there is growing clamour within the industry for further radical action following the success of last year’s stamp duty cut for first time buyers.”