Political uncertainty and the prospect of economic instability as a result of Brexit have led some experts to predict a property price crash in 2019 – although there is some disagreement about who would be the winners and losers in the event of a steep decline.
The statistics so far
Indeed, there is evidence to suggest that a drop could be imminent. Figures from Nationwide show a rise of just 0.5% in December 2018 – the slowest rate of annual growth since 2013. Meanwhile, Rightmove reported an average price fall of £5,000 in November.
Former hotspots such as London and the South East appear to be particularly vulnerable, but there may also be a ripple effect across the country as the downturn spreads north.
Even the Bank of England has issued a warning, suggesting that prices could tumble as much as 30% in a no-deal scenario.
Bursting the property bubble
Of course, it could be argued that the market could no longer sustain ever-increasing prices – with or without the looming presence of Brexit. The dream of ownership was moving beyond the reach of most first-time buyers because property was simply too expensive.
Therefore, those who may found their attempts to get on the property ladder previously thwarted would actually benefit from a price crash – and may even be actively hoping for its arrival. Homes would once again be affordable as the property bubble is burst.
However, as some commentators have pointed out, if there is a downturn, there will be fewer houses being built in the first place. Developers wanting to protect their investment may well choose to delay much-needed building projects.
Property price crash winners and losers
Older and more vulnerable people wishing to cash in their properties to pay for social care could end up losing out.
There are also those who have recently purchased – a group who may well find themselves in a negative equity situation should their homes suddenly decline in value. Meanwhile, there are areas of the country which have not yet recovered from the last property price crash.
So, where a correction of prices will be welcomed by some, there are certainly others who will be watching with concern.