Survey of property professionals suggests leaving the EU without a deal could lead to a 3% fall in prices
Housing market experts have indicated in a new poll that a no-deal Brexit would likely have a negative impact on property prices.
Surveyed by Reuters, the panel of respondents included property consultant Henry Pryor and economic research consultancy Capital Economics.
Some 85% of those polled believe prices across the UK will fall in the first six months should it leave the European Union without an agreement on October the 31st, by an average of 3% nationally and as much as 10% in London.
However, the UK’s departure could lead to a 1.5% increase in property prices across the UK and 1.4% in the capital over the same period should a transition deal be agreed in time.
Forecasts for price growth in future years remain muted, with expectations that house prices will rise at similar levels to the current consumer price inflation rate, despite the lower value of sterling.
“Despite the new PM and team in government there are big icebergs ahead, not least the apparent willingness to leave the EU without a deal,” Pryor commented. “This is likely to spook the markets before it reassures them.”
Hansen Lu, analyst at Capital Economics, noted that the combined lack of housing supply and lower mortgage rates “are helping to prevent the current slump in house price growth from developing into an outright fall in prices.
“Yet on the other hand, Brexit uncertainty, as well as the high level of house prices relative to incomes, continues to weigh on buyer demand.”
However, his comments are at odds with the latest house price index by Rightmove which suggested buyers are deciding to act ahead of the current Brexit deadline as sales agreed jumped 6.1% in August.