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Housing Market

KMPG says house prices will drop by AT LEAST 6% after a hard brexit

Global accountancy firm says leaving the EU without a deal would make the government's house building targets 'impossible to achieve'.

Nigel Lewis

house prices

A leading accountancy firm has issued its predictions for house prices in the event of a no deal Brexit.

The gloomy report said house prices could fall by between 5.4% and 7.5% across different regions next year if a new agreement with Brussels is not reached.

KPMG said that their analysis of average house prices across the country showed a no deal could trigger a nationwide decline of about 6% in 2020 and that and a drop of between 10 and 20% was “not out of the question”.

Jan Crosby, UK head of housing at KPMG, said Britain leaving without a deal would probably lead to a sharp drop in sales volumes as wary homeowners wait for the turbulence in the property market to clear. This in turn would “make government housing delivery targets impossible to achieve and slow new building across the sector”, he said.

House prices

If KMPG is correct, the nation will be hoping that the Prime Minister can reach an agreement to leave the EU with a deal on 31 October. If he does, KPMG suggested house prices would continue to rise next year, growing by about 1.3%. The north-west would be expected to record the fastest growth in 2019, of 1.6%, while Yorkshire and the Humber would take the lead in 2020 with growth of 2.4%.

Jan Crosby added that Britain leaving without a deal would probably lead to a sharp drop in sales volumes as wary homeowners wait for the turbulence in the property market to clear. This in turn would “make government housing delivery targets impossible to achieve and slow new building across the sector”, he said.

Yael Selfin, Chief Economist at KPMG UK, said 2020 would 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,” she said.

Read more about Brexit and house prices.

September 3, 2019

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