Hey guys. So welcome to UK Property News. So today's first story, basically, you know, it's interesting because we're seeing lots and lots of negative media and every week, I'm, you know, bringing you negative...I would love to say I bring, you know, huge amounts of positive. The thing is that I look at this and, you know, I mean, well, actually let me explain. So Mark Carney, the Bank of England Director, basically he's come out to say that if there's a no deal in Brexit, that house prices could drop a third and interest rates could go up by 4% and basically, the whole world will turn to crap. Well, not the whole world but Britain. And look, he has that interest because basically, his role is to predict these sort of things and to come out with what he thinks will happen and the thing is when you look at the data, it's a kind of that's the worst-case scenario. So if that's the case, as property investors, we should maybe, look, what happens if it goes down a third. What happens if interest rates go and really going down a third, you know, I don't agree with it and I'll explain why in a sec. But I think, you know, house prices dropping isn't necessarily the bad thing. Interest rates rising 4%, that could be very damaging but here's why I don't think this will happen and here's why I think even if there is a no deal Brexit, I don't see that interest rates are going to rise that much, and it all turns to crap.
And the reason is this. Is because if you look at everything that's been happening, we normally have this cycle where basically, house prices shoot up, they sit there and then they shoot up again and actually, they sort of go like this, you know, an up and down. But the reality is that if you look at what's happened over the last few years, excluding London, house prices actually haven't run away and grown that much in the last 10 years. They just haven't gone up that much, you know. London is the exception but look what's happening in London now, London prices are dropping and if you have a look at this graph here, as much as everyone's saying how bad things are and house prices are dropping and sentiment's dropping and all these sorts of things, the reality is that London, yes, things are decreasing but everywhere else, things are increasing.
Now, they're not galloping away but, you know, if they were galloping away, I would be concerned. We actually don't want a market that gallops away because that scares everyone and therefore, we're gonna put the clamps on it. Now, we've already been putting the clamps on it. Tax changes, stamp duty changes, you know, all these sorts of changes. The mortgage affordability and mortgage criteria. It's an amazing thing, how they've just put more and more clamps on the market. Now what that has meant is that rather than prices going up like this, what they've actually done is they've kind of gone like this and the thing is if they go like this, they tend to go like that. If they go like this, they tend not to go too much down. So this whole third, I just don't get it and you know, and I think, to be fair, he's going to be proven wrong, he's leaving next year. I mean just last month, he was talking about the fact that he's upbeat about the market and you know what? The statistics are pretty cool right now. Looking a bit deeper into it, come the next story. Look, July wasn't a good month but the reality is we had the weather, great weather and we had the World Cup which everyone was distracted, the whole country got in on it, on the act, you know, because they did so well. So the reality is, you know, that affects sentiment, that affects demand, that affects house prices in that month.
So this is not surprising and guess what? August is going to do the same thing because there's been good weather and that's the traditional holiday month. I mean, I think I've gotten seven people off today, you know, in my business and it's like seven people, normally we have about two or three off each day. We've got seven, so that's four times as much, or as many people as we normally have. That affects business, that slows things down. People are overseas, you know. And that's the other thing, a lot of people are going overseas this year which is great. Sure the staycations but you know.
So the next, what I want to talk about is are international buyers coming back? I mean, lots of stats have been coming about how UK buyers are making up the majority of the market which is actually what the government politically is trying to say they want to happen but are they actually doing it? I mean, Sadiq Khan came out and said, when he first go into it, this is the mayor of London, come in and said, "I'm going to do a review of all foreign ownership in London." And I don't think I've heard anything about it. Maybe he's still doing it, I don't know. But I dare say that they realized that is part of the thing now, London being an international market, Manchester being an international market, Birmingham, and that's the first time I've said this.
I think those three places, above all else, are going to perform best and you know, yes, if you can't afford London, get into Manchester, get into Birmingham because actually, they are world cities now. Manchester in particular because you've got, you know, so many flights from international destinations, direct flights, into those areas. And if you're in the streets of Manchester, you'll start seeing lots more internationally faced people. I don't know whether that's...that's not a racist comment but the reality is you won't see English and we're already seeing that in Australia in a massive way. When I go back home versus 20 years ago, it's changed. These are international cities now and international cities attract international investors, international buyers and aren't necessarily, you know, as affected by the local market that you're in or the country that you're in because you've got that. We're seeing a lot more. I mean, we're actually getting a lot more international interest in property right now which is fantastic. So, another story. Housebuild bosses cashing in or selling out their shares. You know, and when you first look at it, you know, "Oh, well they must know something. They're getting out of the market before it all turns to crap." Well, probably, maybe, who knows? But actually, I think what it comes down to and I know this from actual...not actual experience, I'm not going to say that, I'm not getting these bonuses. Tony Pidgley, Berkeley Homes, great developer. They actually set and I think this was in 2012, they set up a five-year thing. So that's 2017, were basically bonuses, you know, the top level bonuses and I think it was about $300 million they stand to gain. Well, they've started cashing that in. You know what? Good on them.
They actually have performed very well and a lot of this stuff you're seeing now is because the performances back in 2012, '13, '14, '15, not necessarily right now performance. To be fair, these guys and the house builders took heed of the problems they had before and they've put more of a long-term view on, you know, high-level executive bonuses and good on them, you know. And you know what? If they earned that, fantastic. I mean, it's pretty cool. Like, you know, we're talking $67 million Tony Pidgley taken over the last year, we're talking $75 million Redrow. So these are big figures but these are some of the top companies in the UK and how does that compare to other industries? Well, you know, fairly well. The housebuilding has been doing well. You might find that it doesn't do as well over the next five years as we sort of slow down and the London market slows down and comes back out.
So let's talk about Brexit, I've got two more stories actually. Brexit. So Brexit's the first one. You know, this story really is about, you know, we need a vision. We need something. I mean, it's just ridiculous. Mark Carney's coming out saying no deal's potential third drop in house prices, you know. There's so much negativity and what it's pointing to is now these politicians have to get their act together. The problem I see is that there's no leadership and the leader, Theresa May...leader? I don't even know if I can call her a leader. You know, the figurehead, Theresa May, who's totally inept I think, personal opinion but yeah, just isn't getting it. There's just no vision. I mean, her Brexit means Brexit, her soft Brexit, hard Brexit, she's just all over the place and I think she hasn't got her party backing her. She's got half of it going this way, half of it going that way, you know.
And my final story that I'll finish on is the stories are now starting to come out that Boris Johnson potentially could be PM and I hate to say this but I think there's something in that. I think Theresa May has to go and I think these style of people saying Boris for PM, Jacob Rees-Mogg for PM, these are the sort of things that are starting to come out because you've got an inept leader. So what's happening now? People are starting to rally their support and I think very soon if we don't get a thing about Brexit, I think Theresa May will be out. Personally, I think she should go out now and just jump before she's thrown.
Okay, guys. So that's it for this week. So remember, subscribe and comment. I answer all the questions you've got, I'll record videos if you, you know, want them, if they're appropriate for the response. I'm back into doing lots and lots of content, you know, I'm really motivated, things are really happening, it's great. So feel free to subscribe, comment and I'll get back to you. All right guys have a great day.