What will happen to property? Here is a summary of what some predictions are
A turnout of 72% of the population saw 51.9% back leaving against a 48.1% vote to remain – prompting David Cameron’s announcement that he is to resign.
The UK will now at some popint start the formal process of a Brexit invoking previously unused rules in the Lisbon Treaty known as Article 50.
This takes us into unchartered waters with no idea what will happen to jobs, the economy and the property market.
Much of the Leave campaign’s propaganda promised us we would end up better off after a period of volatility, but here is a reminder of what many predict will happen to the property market.
Many developers offered Brexit clauses and there were reports of buyers and sellers holding back. So the next few months will be worth watching to see if the result unplugs the market or causes a slowdown as investors exit. Conversely, a falling pound as a result of the Brexit could result in the UK being a more affordable place for property investors.
Many predicted a fall in house prices, hitting home owners looking to release equity or move.
However, a fall in house prices has some positive affects as it could make property more affordable for first-time buyers.
A doomsday style report by the Treasury in May warned property prices could fall by between 10% and 18% after a Leave vote. This echoed IMF warnings of a “sharp drop” in house prices.
Property portal Zoopla was slightly more gloomy, predicting that house prices will fall 20%
Zoopla says that a Brexit would wipe out nearly all of the house price gains made over the last five years and leave some home owners in negative equity.
Zoopla says the average house price of just over £297,000 would fall by over £53,000 due to the combined effect of uncertainty, increased unemployment, reduced investment and higher borrowing costs.
Altogether, it forecast, an out vote would cut £1.5trillion off the total value of the UK’s housing stock.
Andrew McPhillips, chief economist at Yorkshire Building Society was slightly more positive, he said: “Demand for properties is likely remain fairly strong as people will still want to own a home. Although demand could fall to some extent, the lack of supply is likely to mean that house prices will continue to grow, albeit at a reduced pace.
“That said, if the Bank of England does not cut the Base Rate, wholesale funding costs for lenders could increase, which may lead to reduced availability of credit. This would further reduce demand, which could cause house prices to fall.
“London could be hit hardest by a drop in demand as foreign investors are likely to postpone buying properties until the full implications of the decision are clear.”
But the level of doom and gloom really hinges on who you speak to.
A report for the National Association of Estate Agents by the Centre for Business and Economic Research actually estimated that house prices would go up in both eventualities.
It estimated that if the UK votes to remain in the EU, by 2018 the average UK home would cost £303,000.
It estimated that should the UK vote to leave the EU, average prices would stand at £300,800 by 2018, but that was just £2,200 less than what it predicted if we had voted to remain.