One of the country’s leading property experts says she expects buyers to hold off over the summer as a result of the Brexit vote - but insists prices may not fall significantly if agents and sellers hold their nerves.
Kate Faulkner says supply and demand are critical to what happens next.
Prices could be held back as buyers understandably delay their purchases in a ‘wait and see’ scenario, but if sellers hold their nerve - and even take their homes off the market for the summer months - this could avoid significant price falls, she adds.
“If sellers panic and reduce prices to sell over the summer, this could cause a longer period of house price stagnation or, in some areas, falls. Bearing in mind some areas and properties haven’t yet recovered to their pre-credit crunch prices, this could make it harder for people to move and increase the risk of negative equity for some” warns Faulkner, who runs the Designsonproperty consultancy.
However, agents remain predominantly pessimistic following the vote - although hopeful that long-term strong fundamentals in the housing market will overcome short-term problems.
“Pre-vote there were a number of predictions of a negative impact in terms of house price levels and housing transaction numbers brought about by a vote to Leave, and there are obviously concerns that these predictions will now be played out” says Rob Clifford, chief executive of Century 21 UK.
“We expect some clients to pause to familiarise themselves with this news, but in the past we have found the UK property market has been very resilient against changes in legislation” according to Martin Robinson, director of sales at Hunters Property Group, which has Conservative MP and Remain advocate Kevin Hollinrake as chairman.
“This result will bring further uncertainty and also creates far more questions than it answers in terms of what happens next as Britain extricates itself from the continent in terms of procedures and processes. It’s also worth noting that if the pound weakens against the Euro as some have predicted, then it could lead to a significant increase in overseas property purchases – not bad news in itself, but unlikely to have been among the intentions of many ‘leave’ voters” claims Marsh & Parsons chief executive David Brown.
“In the short term things could be turbulent as people come to terms with a result that wasn’t expected. But we now have certainty. It’s up to the government to lay out a clear timetable for renegotiation with the EU so that we can get on with doing what British people are very good at – buying and selling houses” says Paul Smith of haart.
“The most likely scenario is one that we have seen before in other times of dislocation - 1987, 1998 and 2008 - a period where the market seizes up and the only activity is between the brave and the desperate” warns Charlie Ellingworth of the high-end buying agency Property Vision.