No house price crash says PWC

The UK will avoid a severe recession and a house price crash following the Brexit vote, PricewaterhouseCoopers has said.

It believes that there will be a marked slowdown in house price growth, but no major crash.

It believes that house prices will grow 3% this year and 1% next, before house price growth picks up again in 2018 to around 4%.

In the longer term, it thinks house price growth will average 5% to 6%, with persistent supply shortages keeping house prices rising faster than earnings.

PWC also forecasts that GDP growth could fall to 0% by the end of this year and could be somewhere between 1.5% growth next year or a 1% decrease.

Even if the latter happened, there would not be a severe recession.

Separately, the French bank Societie Generale has warned that Brexit could cut London house prices by 30% – or even by up to half.

It says that in the wake of the Leave vote, companies will move employees, including highly paid investment bankers and hedge fund managers, out of the UK.

It believes that some 3,000 senior staff living in expensive boroughs could be moved out of Britain, and would put their homes on the market.

Warning that residential property in London could be hit harder than commercial property, Societie Generale said: “We see a classic housing bubble in London and Brexit as the trigger for the correction.

“Given the current ratio of prices to incomes in London, a price correction of even 40-50% in the most expensive London boroughs does not seem impossible.”

At the end of last week, LonRes reported 1,027 new instructions and over 100 new price cuts on properties in prime London

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Written by: Houseladder