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No major house price crash, forecasts PWC
House prices will slow but there will be no major crash as a result of the Brexit vote, Pricewaterhouse Cooper (PWC) has predicted.
The auditor, in its latest UK Economic Outlook report today, said it anticipates a “marked slowdown” in house price growth, but no major crash in which UK house prices fall overall.
In PWC’s anticipated scenario, house price growth falls to 3% in 2016 and then to 1% in 2017 before picking up to 4% in 2018 and an average of between 5% and 6% longer term.
Richard Snook, senior economist at PwC, said: “We think there are four main reasons why the Brexit vote will lead to a slowdown in the housing market in the short term: the deterrence of foreign investment, uncertainty regarding the future of EU nationals living in the UK, a reduction in consumer confidence and turbulence in the banking sector.
“While these factors will weigh heavily on the market in the short term, we expect a gradual recovery from 2018 onwards as market fundamentals reassert themselves.”
PWC estimates house prices in 2018 could be 8% lower than they would’ve been had Britain not voted to leave the EU, although they will still be 8% higher than they were in 2015.
The report draws on previous analysis by PWC by the Confederation of British Industry, updated with economic data to the end of July.
