Orderly exit from the EU could see property prices stabilise in 2019 and recover by 1.3% next year
New research by one of the world’s Big Four accounting organisations has laid out its forecasts for house prices in the UK based on the two possible Brexit outcomes.
Citing statistics from Land Registry, professional services networking firm KPMG said house price growth has slowed from 8.2% year-on-year in June 2016 to just 0.9% in June of this year.
It notes that any delays to Brexit would only lead to more prolonged uncertainty and continually low levels of buyer confidence, ending with a similar binary choice between deal or no-deal that the country now faces.
In their deal scenario, KPMG assumes that the UK leaves the EU in an orderly manner, either on the 31st of October – the current scheduled date – or after a brief delay needed to ratify the withdrawal agreement.
As a result, house prices would stabilise with a minor fall of 0.1% in 2019, and rise by 1.3% in 2020, with the North West performing better than anywhere else during these 2 years whilst London would be the worst region for growth.
However, should the UK leave without a deal on Halloween, house prices are expected to decline by 1.1% this year, and then by an average of 6.2% across the UK in 2020, with Northern Ireland and London both at high risk due to their exposure to trade with the EU.
Jan Crosby, Head of Housing at KPMG’s UK network, said: “Looking forward to 2020, next year promises to be a delicate year for the housing market. Even if Brexit can be resolved relatively smoothly, the travails of the global economy will impact growth in the UK, making prospects for house prices relatively subdued.”
Their predictions are more pronounced than a recent survey by Reuters, which forecast prices will rise by 1.5% in the event of a deal and fall by 3% in a no-deal scenario.