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.
Well, if the PwC is right then what about 7% deficit at BoP?
http://moneyweek.com/britains-current-account-deficit-the-deficit-that-nobodys-talking-about/
Is it not too early to be such optimistic.
Housing market related predictions are expected from RICS,CIOB etc not from PwC!
RICS and other leading experts saying that there will be around 18% losses in typical house prices across England,at some point.
So if wiping 18% house prices off isn’t called a crash, what that would be?
At PwC, please stop poking nose everywhere. You guys are misleading the nation.
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BOP doesn’t have anything to do with house prices .
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I LOVE ‘EXPERTS’, I DO.
Chuck five of them in a room together and you immediately have a minimum of seven ‘expert opinions’ to pick from.
The predictions of PwC will simply meld with the rest – there will be pieces (however small or large) that will prove correct in some shape or form; other snippets that will be best forgotten on their part but no doubt another ‘expert’ will regurgitate and rub their noses in.
That’s the game. You want column inches – make a prediction.
Speaking of which – what does Mr Pryor make of all this?
After all – he stated that EYE is a “space for real people whose reputations provide them with a platform of credibility for their views” – yet he has not graced us with his views since.
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Growth was rebounding, including in the eurozone. Things seemed to finally be looking up.
Now people rejoice because PWC predicts that the economy will completely stall instead of going into a full recession…
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