Thursday, October 1, 2020
UK

London house prices to see big fall in the event of no-deal Brexit

Brexit

House prices in parts of London have been predicted to see the biggest fall in the event of no-deal Brexit

New data and analysis from property investment platform, British Pearl, has identified which areas of the country are likely to see the biggest fall in house prices in the event of no deal being reached on the UK’s departure from the EU.

According to the findings, a highly polarised housing market means property prices across London’s commuter belt will be hardest hit with places like Stevenage, Watford and Hastings feeling the full brunt of the no-deal sledgehammer.

The average detached house in Stevenage was 197% more than the average flat (£553,697 vs. £186,422) – the fifth largest gap anywhere in the UK with growth of 68.2% in five years.

The combination of these two measures makes the Hertfordshire town the most polarised property market in Britain, followed by Watford, Bedfordshire, Hastings, and East Sussex.

The price gap between flats and houses in Watford has grown 53.2% to 201.4%, while in Hastings it has widened by 63% to 184.7%.

The warning comes after Bank of England Governor Mark Carney warned a chaotic withdrawal from the EU could cause house prices to crash as much as 33% in a worst case scenario.

At the other end of the spectrum was Doncaster, where the average detached house was 140.6% more than the average flat, while the gap between prices over the five years increased just 18.4%.

Doncaster was followed by Stoke-on-Trent, with a price gap of 131.2% that had grown just 26.9%, and Blackpool where prices were 153.9% apart, after widening 12.3% in five years.

Investment manager at British Pearl, James Newbery said parts of the UK property market have made considerable gains and, the relative value of homes in different price bands now poses a serious risk to homeowners and investors in the run-up to March 2019.

The fallout from no-deal is most likely to be felt hardest in the capital’s commuter belt, where markets have moved too far and too fast. That is bad news for both ordinary investors and homeowners, particularly those who have borrowed to make their purchase.

However, the study also shows being diligent about the area a buyer buys in can help a buyer avoid these increased risks, with huge variations being seen in this polarisation measure across the country.

Important:
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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