Brexit house prices: what the experts think
● Safely flat?
“Brexit uncertainty is still weighing heavily on the UK housing market”, which has barely moved over the past month, said Rupert Jones in The Guardian. According to Nationwide, the average house now costs £216,096, some £1,567 less than it reported a month ago. Seasonal factors are at work but, overall, “house price inflation has now remained below 1% for nine consecutive months”. Given the precarious political backdrop, a flat housing market “could almost be viewed as a positive” – and the consensus among analysts is for more of the same. Even though Parliament has attempted to block Boris Johnson from a no-deal Brexit, Hansen Lu of Capital Economics reckons uncertainty will continue putting the kibosh on house-price growth for the rest of the year. Ultimately, the Brexit effect depends heavily on where you live, said David Byers in The Times. And the outlook appears to be “decidedly sunny in the proBrexit areas of the North”. Research by Hamptons shows that Leave-supporting urban areas have registered the biggest rises since the vote. They’re up an average 19% in the West Midlands, meaning a “Brexit dividend” of more than £30,000 for Birmingham residents. The area with strongest price growth was Leavesupporting West Somerset, where prices are up by a whopping 38%. Admittedly, “affordability pressure” has had a big influence on the swing. But political outlook may have had an influence too, said buying agent Henry Pryor. “Perhaps these figures demonstrate that Leave areas are by and large more confident of the post-Brexit world we are about to inhabit.”
● What next?
KPMG reckons that UK house prices could drop by 6.2% next year if there’s no deal, noted BBC Business. London prices will probably fall whatever happens. But others reckon the capital is due a boost – and will get it if the low pound offers the “discount” international buyers “have been waiting for”, said Yahoo Finance UK. Prime central London prices are down 15% from their 2014 peak, said Marcus Dixon of LonRes. But dollar-buyers have benefited from “a 45% discount on the peak price because of sterling’s weakness”. No-deal would probably mean an even bigger discount.