Bank of England Governor, Mark Carney, has warned ministers that, should no deal be reached on our exit from the EU, house prices could slump 35% over the next three years.
According to the latest Land Registry figures, the average UK house price in June 2018 was £228,384. If prices fell by as much as Mark Carney suggested they could fall, the average value of a UK property would slump to £148,449. Housesimple research reveals the last time prices were lower than this figure was June 2004, more than 14 years ago.
Housesimple.com also looked at the impact of a 35% drop in house prices across 50 major UK towns and cities. The research revealed that average prices in London would fall from £476,752 to £309,889, but due to the phenomenal property boom in the capital over the past 7-8 years, this would only mean prices fall back to October 2012 levels.
The impact of a 35% slump would be felt a lot greater in many Northern towns, where house price growth hasn’t been so rapid over the past decade. For example, a 35% drop in Blackpool, would see average prices crumble from £103,920 to £66,890, a level that hasn’t been seen since March 2003. While in Durham and Newcastle averages prices would drop back to June 2003 levels. At the other end of the scale, Luton would only see average prices fall back to March 2014 levels, from £238,243 to £154,858.
Sam Mitchell, CEO of online estate agents HouseSimple.com, comments: “Mark Carney has been incendiary with his comments, but if his predictions help galvanise politicians into action, then maybe the end justifies the means. The longer we go without having a deal on the table, the more uncertainty will weigh on house prices. However, it’s highly unlikely prices will slump to the level that Carney has predicted, even with a “no-deal”. The UK property market has proven to be able to withstand some pretty turbulent economic news, not least when the country voted for Brexit and after Article 50 was invoked. And there’s no reason to think it can’t withstand whatever lies ahead.”
