No-deal Brexit would plummet house prices

2 September 2019, 05:33

House prices in Scotland risk a 6% drop if the UK leaves the EU without a deal at the end of next month, new analysis indicates.

The drop would mean an average house price in Scotland of £141,000 in 2020.

Researchers at professional services firm KMPG UK warn a fall of 10-20% is "not out of the question" if the market reacts more strongly than anticipated.

However, if the UK leaves with a deal and Brexit proceeds smoothly the analysis forecasts a house price increase of 1.4% in 2020, meaning the average Scottish home selling for £153,000.

The figures were compiled using statistics from the Land Registry as part of KPMG's economic outlook research.

Jan Crosby, the firm's UK head of housing, said: "While a no-deal could dent property values in the short-term, it doesn't detract from the fundamental factor driving the market - the lack of regional housing supply.

"Sales volumes will likely fall much more than prices, making government housing delivery targets impossible to achieve and slowing new building across the sector."

Catherine Burnet, senior partner at KPMG in Scotland, added: "Our data suggests 2020 could be a particularly delicate year for the housing market.

"Even if a positive resolution can be found to the Brexit dilemma, increasing geopolitical uncertainty could impact growth in the Scottish economy, making prospects for house prices relatively subdued."