House prices across the UK could fall by as much as 10 per cent next year in the event a no-deal Brexit, a leading credit rating agency has warned.
According to Standard & Poor’s, should the UK leave the EU without a deal at the end of this month, then average UK house prices will end the year 1.7 per cent lower than they were at the end of 2018.
In a report released yesterday, Standard & Poor’s forecast that prices will then tumble another 10.2 per cent next year and then by another 6.1 per cent in 2021.
Although they predict prices will start to rise again by 2022, the forecast 5.9 per cent increase would only go a little way towards recovering the previous losses.
Standard & Poor’s predictions paint a gloomier outlook than that of some other agencies. That said, even a report released by KPMG said that while they expect house prices to fall by around 6 per cent in 2020, “a drop of 10-20 per cent is not out of the question.”
In July, the Office for Budget Responsibility said house prices will drop by 5.9 per cent in 2020.
However, should the UK agree a deal with the EU between now and 31st October, then S&P says the outlook for UK house prices is much brighter. In fact, in the event of a deal, house prices are actually predicted to rise 1.5 per cent year, after being flat this year.
Article published 16th October 2019