Letting agents have moved to express their reaction to the historic referendum result-with comments ranging from pessimistic to downright resigned.
The market has been plunged into further uncertainty with the shock news that Prime Minister David Cameron is to resign.
Brexit-the reaction
Key figures gave their reaction:
Property market analyst Henry Pryor: ‘House sales expected to fall 20%. House prices expected to fall 15%. Sterling crash makes UK prices 10% lower for foreign buyers already.’
Frank Webster, director of Finders Keepers letting agency: ‘UK voters opt to jump off a big cliff with long fall ahead. All of us asked to vote for something none of us understand.’
Hometrack research director Richard Donnell: ‘The decision to leave the EU will be most keenly felt in the London housing market which is fully valued and already facing headwinds. History shows that external shocks can reduce sales volumes by as much as 20%.’
Adam Challis of JLL: ‘We expect an immediate slowdown in housing market transactions, in the order of 10% to 15%, resulting in downward pressure on prices for at least a couple of years. We anticipate current activity levels will return but this is unlikely before late in 2018.’
Andy Martin, senior partner at Strutt & Parker: ‘it is going to cause a huge amount of disruption to the markets while everybody takes stock of what it actually means and the government starts giving us clear policy direction. Before then we are going to have volatility, which is a risky thing to have in these markets because economic performance is still not something that is a given.’
UK votes for Brexit-the industry reacts
Immediate falls
Member of London agency Kay & Co, Martin Bikhit, observed: ‘A vote for Brexit will immediately see the value of Sterling fall. This will in turn create a spike in demand as London property will be more attractive to opportunistic investors who will take advantage of the bigger spending power, but it is the wrong sort of demand that will ebb away as prices fall. Normally, the falling prices should spur the market into action, however, I can see that both domestic and foreign buyers will continue to wait and see how far prices can or do fall, to make the most of their money.’
Charles Curran, principal of Maskells estate agency in the capital , said: ‘We expect the domestic buyers to remain subdued, perhaps opting for rental accommodation (rents being low for the time being due to oversupply and high cost of acquisition), but we do we expect more interest and volumes from overseas buyers. An unwanted consequence of leaving the EU is that our currency will depreciate, making property cheaper in net terms compensating for the high stamp duty in prime and prime central London.’
Looking to the future, Alex Newall, managing director of prime market agency Hanover Private Office, noted: ‘We can no longer use past data accurately to help predict the future. Over the next two years, until Brexit actually happens, gradually the rule book will be re-written on asset prices in the UK. Yield hunters, e.g. pension funds, will have to be careful to protect their underlying asset value over the next two years and pre-planned exit strategies will need to be considered.’[1]
[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/6/its-over–agents-have-their-say-on-the-eu-referendum-result