Leaving the EU without a viable and agreed Brexit deal at the end of October could cause house prices to fall by more than 5%.
A no-deal scenario could trigger prices to decrease between 5.4% and 7.5% on average, according to accountancy specialists KPMG.
Speculation regarding a no-deal scenario has gained momentum in recent weeks following a number of political incidents including, Boris Johnson’s suspension of parliament and consistent rhetoric referring to the last resort option.
The KPMG data further called for changes to stamp duty land tax (SDLT) which were constantly alluded to by the Prime Minister during the conservative leadership race.
The research insists that switching the liability from buyer to seller will help to stabilise the market in the short term. It is claimed that announcing the liability transfer in the Autumn Statement could give the housing market the boost it will need as buyers and sellers hibernate in the aftermath of October 31st.
Conversely, the UK could leave with a deal in place which significantly changes the outlook of the property market.
Despite property prices growing by less than a single percent each month since the start of the year, KPMG predict that an orderly exit, with a deal, will create a stable market with marginal growth of 1.3% in 2020.
Yael Selfin, KPMG’s chief UK economist, said:
“A no-deal Brexit will see household finances more under strain, with any rises in earnings likely to be more subdued and higher inflation depressing their purchasing power even further.”
”Add to that a rising unemployment rate and an overall decline in confidence as a result of the initial disruption, and you can see why people would hold off making any major financial commitments, which would trigger a larger correction in house prices.”
Are conveyancers concerned that transactions will reduce following Brexit?
