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Threat to UK house prices from no-deal Brexit

Threat to UK house prices from no-deal Brexit

While house prices are expected to increase once the Brexit uncertainty has lifted and a deal has been agreed, a no-deal could see house prices fall.


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  • If the UK exits on 31 October with a deal, house prices are expected to stabilise in 2019, rising by 1.3% in 2020 
  • On the other hand, a no-deal Brexit on Halloween could cause UK house prices to fall by between 5.4% and 7.5% across the different UK regions in 2020

While house prices are expected to increase once the Brexit uncertainty has lifted and a deal has been agreed, a no-deal could see house prices fall by around 6% in 2020, with a drop of 10-20% not out of the question if the market reacts stronger than anticipated, according to new KPMG UK research.

Under a deal scenario, which assumes Brexit is resolved smoothly, little change in house prices is likely to be seen this year. Nationally, the analysis forecasts the overall pace of house price growth to then accelerate to 1.3% in 2020. The North West is expected to see the fastest growth in 2019 (1.6%), while Yorkshire and the Humber takes the lead in 2020 (2.4%). Meanwhile, house prices in London will continue to fall in 2019 and 2020, with the sharpest drop of 4.7% expected this year.

However, the research finds the initial impact of a no-deal on the property market could see a house price decline across every region in 2020, with the sharpest fall (7.5%) seen in Northern Ireland, followed by London (7.0%).  

Yael Selfin, Chief Economist at KPMG UK, commented: “The housing market has been stuck in the slow lane since 2016 – with the changes to stamp duty and the uncertainties of Brexit putting the market on the back foot.  

“As our forecasts show, a no-deal Brexit will see house prices decline significantly across the UK in 2020 by an average of 6.2%, with more severe falls of around 10-20% also possible if we look at historic precedents.”

Brexit impact on average house prices

According to the analysis, the average house price in 2020 is expected to be lower under a no-deal Brexit across all UK regions. In the case of London, it finds that if Brexit goes smoothly, an average property will cost £453,000 but in the event of a no-deal, this would drop to £422,000 – while the rest of the regions would see a smaller difference.

Table: Average UK house prices by end of 2020 

London 453,000 422,000
South East 327,000 299,000
East of England 296,000 269,000
South West 260,000 240,000
West Midlands 196,000 182,000
East Midlands 191,000 177,000
North West 167,000 152,000
Yorkshire and the Humber 164,000 150,000
Wales 164,000 151,000
Scotland 153,000 141,000
Northern Ireland 135,000 123,000
North East 129,000 116,000

Jan Crosby, UK Head of Housing at KPMG, commented: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.

“Also, the level of leverage in the housebuilding sector is much lower - meaning that volume housebuilders will be under less pressure to materially reduce prices, which helped to create the downward spiral of prices in the global financial crisis.”

Yael Selfin, Chief Economist at KPMG UK, concluded: “Looking ahead to 2020, it promises to be a delicate year for the housing market. Even if Brexit can be resolved relatively smoothly, the travails of the global economy will impact growth in the UK, making prospects for house prices relatively subdued.

“A potential upside for the housing market could come from current government plans to change stamp duty such as shifting the burden from the buyer to the seller, which if delivered in time for the Autumn Statement, could lead to a potential increase in demand from buyers, providing a short-term boost to the housing market.”


- ENDS -


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About the research

The forecasts were produced by KPMG using a suite of external and in-house models capturing the main inter-relationships in the UK and world economy. As with all forecasts, these are subject to considerable uncertainty and the outturn may differ significantly. For more details, please see the full “Economic Outlook” at:


About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

© 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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