"In the short term the additional uncertainty will disproportionately affect London, causing the value of some properties, particularly high value properties, to fall further."
30 housing market specialists predicted that prices will tumble if Britain fails to reach a Brexit deal and expect an annual fall of 1.6% this year and 0.1% in 2019.
When asked what effect a disorderly departure would have on London prices, responses ranged from “short-term fall” to “damaging” to “disaster”.
John Charcol's Ray Boulger said: “In the short term the additional uncertainty will disproportionately affect London, causing the value of some properties, particularly high value properties, to fall further."
When asked about the likelihood of a 'significant correction' in London’s housing market before the end of 2019 the specialists gave a median of 29%, with the highest recorded at 75%.
When asked to rate the level of London house prices on a scale of one to ten, where one is extremely cheap and ten extremely expensive, the median response was nine, compared to a national average of seven.
Another Reuters poll predicted that the Bank of England will increase interest rates by a further 25bps in the second quarter of next year, taking Bank Rate to 1%.
Andrew Brigden at Fathom Consulting commented: “We see little upward or downward pressure on house prices at current near-zero interest rates. However, risks lie substantially to the downside.
“Were interest rates to return to pre-crisis levels or higher, which may prove necessary if there were a sharp fall in sterling after a General Election, for example, then house prices could fall by around 40%.”
