While house prices are expected to increase once the Brexit uncertainty has lifted and a deal has been agreed, a no-deal could see house prices in the West Midlands fall by around 7% in 2020, with a drop of 10-20% not out of the question if the market reacts stronger than anticipated, according to new KPMG UK research.
Under a deal scenario, which assumes Brexit is resolved smoothly, little change in house prices is likely to be seen this year. Nationally, the analysis forecasts the overall pace of house price growth to then accelerate to 1.3% in 2020.
The North West is expected to see the fastest growth in 2019 (1.6%), while Yorkshire and the Humber takes the lead in 2020 (2.4%). Meanwhile, house prices in London will continue to fall in 2019 and 2020, with the sharpest drop of 4.7% expected this year.
However, the research finds the initial impact of a no-deal on the property market could see a house price decline across every region in 2020, with the sharpest fall (7.5%) seen in Northern Ireland, followed by London (7.0%).
Siobhan Lodder, Partner and Head of Housing and Real Estate at KPMG in the Midlands, commented: “There will be some degree of slowdown in the West Midlands housing market no matter what lies ahead and as long as there remain concerns over the future of the UK economy and its relationship with Europe.
“However it doesn’t detract from the fundamental factor driving the market which is the lack of available housing across the region. Sale volumes will likely fall much more than prices – making government housing delivery targets impossible to achieve and slowing new building across the sector.
“Our findings show that the West Midlands market has the opportunity for strong growth in the coming year if Brexit negotiations can be resolved with a deal. At least in the short term, the dampening of prices could offer some relief and provide an opportunity for buyers to get onto the ladder.”
Table: Average UK house prices by end of 2020
|East of England||296,000||269,000|
|Yorkshire and the Humber||164,000||150,000|