Property market reacts to momentous Leave decision and Cameron resigns

A stunned UK woke up this morning to news that the Leave campaign has won and that there is to be a Brexit.

In a further shock – and with breath-taking speed – David Cameron announced at 8.25am this morning that he is to step down as Prime Minister, although he will stay in post for three months to provide stability. He said he had already spoken to the Queen.

In a dramatic speech delivered outside 10 Downing Street, Cameron said: “There can be no doubt about the result.

“I would reassure those markets and investors that Britain’s economy is fundamentally strong.”

Adding: “We have to confront big decisions not duck them. This will require strong and committed leadership.

“I think the country requires fresh leadership.

“I do not think it would be right for me to be the captain that steers the country to its next direction.”

The next Prime Minister, he said, would be in place by the party conference this autumn.

Further shock and uncertainty seem inevitable, with speculation that George Osborne may also depart and that the Bank of England will have to step in to shore up the pound after it fell heavily.

Shares plunged with the stock market initially down 500 points. Rightmove shares fell to nearly £34 from £41, while Purplebricks shares fell to 115p, but both recovered from these lows. Foxtons has taken a big hit, falling over 20%, and Countrywide 18%.

However, one agent – Simon Halling Estates, of Tring, Hertfordshire – expressed optimism after agreeing a sale with solicitors at 10.30am this morning. Halling said he wondered if this was the first post-Brexit deal, adding: “I have also already exchanged on one today, so it is very much business as usual.”

Jackson-Stops & Staff’s Midhurst branch also this morning agreed a sale, of an off-market £5m property this morning, with the firm saying that Brexit had not deterred either party.

Reaction from the industry has been swift to pour in.

Michael Robson, chief executive of Andrews Property Group, said: “The UK’s decision to leave the EU means that the uncertainty of the last few months, which has negatively impacted the market, will now continue and it’s hard to judge for how long this will be the case. This isn’t good news for home owners.

“Previous market cycles suggest that timescales for recovery tend to be slow and long and we should be prepared for anything between three to five years for any significant bullishness to return.

“The great unknown here sits with government policy.

“Who will be in charge?  What will happen to the stock markets and value of the pound?  It’s very possible that some employers could panic and jobs could then be lost.”

Property market commentator Henry Pryor tweeted in doomsday style: “House sales expected to fall 20%. House prices expected to fall 15%. Sterling crash makes UK prices 10% lower for foreign buyers already.” He later clarified that the fall in house sales is Hometrack’s forecast, and the fall in prices is George Osborne’s prediction.

Mark Hayward and David Cox, managing directors respectively of the NAEA and ARLA, said: “The outcome of today’s EU referendum will create a period of uncertainty among home owners, buyers, investors, landlords and developers.

“In the short term we believe that both prices, and rents, will remain stable, but we cannot be certain about the next quarter as political instability, and market unrest, could lead through into prices in the housing market.  We believe that the UK housing market is resilient, as is the supply chain that drives it.”

Knight Frank said there will be “short-term volatility”, with house prices coming under pressure and consumer confidence knocked, but that the long-term market dynamics were unchanged.

Andy Martin, senior partner at Strutt & Parker, said the vote “is going to cause a huge amount of disruption”. He said: “The market has shown signs of volatility in the lead-up to this vote.

“We have seen a real cutback in trading due to the uncertainty of this vote. What we are now waiting to see is how our clients and markets will react to this. I suspect that they will continue to tread with caution.”

Peter Wetherell, chief executive of London agent Wetherell, said: “This morning Sterling has plummeted to a low not seen since 1985 and this will now create a short-term buying opportunity for US dollar and Euro-based property investors.

“This is a market for risk takers and people able to spot high risk but potentially lucrative opportunities that have emerged overnight.”

However, Wetherell forecast that in parts of London, where there are high numbers of EU buyers, there “could now be a dramatic slowdown” which could last years.

Edward Heaton, of property buying agent Heaton & Partners said: “There is a risk that with a period of uncertainty ahead of us, prices may drop off but I believe that any fall will be limited and suggestions of a crash are over-stated.”

Welsh agent Dafydd Hardy said: “Interesting times ahead … Time will tell but there will clearly be uncertainty in the property market. However, moving forward we must now adopt a positive attitude and accept the vote of the people.”

Consultant Michael Day tweeted: “Democratic decision. I don’t agree but need to unite and try and make it work now.”

Russell Quirk, of eMoov, said: “Many will be running to their nuclear bunkers now that the apparent end of the world is nigh. But before they do, they might want to take a breath and sit tight. We’ve voted to leave the EU and regardless of personal views we must respect the democratic position of the populous.

“We don’t anticipate any tangible difference where the UK property market is concerned and the supply and demand balance that is currently dangerously out of kilter will see little sign of stabilising itself.

“Going forward the UK market will go from strength to strength, perhaps with wobbly knees at it emerges from the clutches of the EU, but it will soon find its feet again.

“There may be many buy-to-let landlords and second home owners rushing to list their property for sale in order to maximise their profit, before the ‘Armageddon’ on the horizon destabilises the pound. Ironically it will be these people flooding the market with additional stock that may see prices cool ever so slightly.

“However, property values increased by 6% over the course of 2015 and we predict the same rate of growth by the end of 2016.

“Home ownership will remain far out of reach for the average UK citizen and the overwhelming swell of demand for property will remain despite our choice to leave the EU.

“This could, however, be the final nail in the coffin for the prime central London market, as the capital’s high-end properties have never been less desirable in the eyes of foreign investors. With demand having slumped to record lows over the last year, it’s not looking good for the capital’s property elite.”

One of the few positive comments came from house builder John Elliott, of Millwood Designer Homes, who was delighted with the Leave vote, saying: “I am delighted that today is Independence Day for Britain. Our exit will stop the continual flow of red tape and see our housing market grow and flourish.”

We will be updating this story as the day goes on, and also look forward to seeing your posts as to how our readers interpret today’s seismic events.

Tomorrow, in EYE’s Saturday edition, Marc Shoffman will also be looking at the likely impact of the Leave vote on the residential property market.

  • Have YOU agreed a sale today? Can you beat Simon Halling Estates’ time of 10.30am? Let the editor know.
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50 Comments

  1. Mark Connelly

    You have to laugh at Pryor. He doesn’t know whether to be Doris or Derek. Property to fall 20%. Foreign buyers the backbone of prime London can now buy 10% cheaper . Ooops I give in.

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    1. PeeBee

      Thing is, Mr Pryor has got to 65.6k of Tweets by doing exactly this – quote… quote… quote.  Copy and past every time White says ‘Black’; Black says ‘White’ – and when  Grey says ‘Black’ one day then ‘White’ the next – it’s four more lines on his CV as far as he’s concerned.

      Sad, really.

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  2. Farmer

    It’s not what we think that is important but rather what potential buyers and sellers think that will drive or stall business.

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  3. AgencyInsider

    It is inevitable that speculation will be rife. And it is just that. Speculation. Fear of the unknown will cause short term upheavals but, amazingly, there are countries out there who have never never been part of the EU and they seem to be surviving. I didn’t want to Leave but now that it is going to happen we must deal with the consequences. Whatever happens to house prices I am absolutely certain that people are not going to give up living in them and that there are not enough to go around. Any falls will recover.

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  4. Eric Walker

    It’s a sad day, but remember 52% of voters got what they wanted so will be feeling positive. I think politicians have shirked their responsibility for making the difficult decisions we pay them to make by holding a referendum. Many people have been misled by both sides. Imagine being ill and going to the doctors. Would you seek the diagnosis of the doc or ask the other patients in the waiting room to vote on your treatment? Anyway, it is what it is and as always, agents will find a way to make the best if it. We are good at that.

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    1. RealAgent

      I agree. I think David Cameron spun the wheel to try and hang on to what he knew were Euro sceptic Tory voters. He lost. Sadly in my opinion, this debate descended to a blame on immigration for all our ills and we are now going to have to deal with the economic aftermath.

      Still, I will have a strategy meeting this morning and we will work out our positive spin!

       

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    2. PeeBee

      “Anyway, it is what it is and as always, agents will find a way to make the best if it. We are good at that.”

      Well said, Mr W!

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      1. PeeBee

        Enlighten me.  WHAT is to ‘Dislike’?

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  5. AgencyInsider

    Well that’s made something clear. With Cameron going in October and no trigger of the exit until a new PM is in place we are not going to be out of the EU until at least October 2018.

    Now, are the markets going to spend the next two years of reacting in violent and unpredictable ways. Nah. They will get a grip eventually.

    In the coming days, when you hear all the shock-horror reports of ‘worst day since Black Monday’ ‘worst day since Suez’ ‘worst day since the crash of ‘1929’ remember that we came through it all and flourished again. Whatever happens in the coming months, the storms will pass.

     

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    1. Property Paddy

      I think you will find we are not fully out of the EU till 2020 as it’s not a simple on/off switch.,

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    2. agent orange

      the storms will indeed pass. Its a question of who will still be standing when they do.

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    3. Romain

      But get a grip on what?

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  6. Property Paddy

    House prices will do what they have always done follow the laws of supply and demand. As agents we must adhere to the needs of our clients before we push them to drop their price or short sell just because we live in uncertain times doesn’t mean we must also lose our heads.

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  7. International

    The words are ‘Don’t panic’

    There fundamentals of the UK property markets remain as do the strength of the Nation’s finances.

    There will be immediate turbulence, but as with the stock market, at such times the best thing to do is “sit tight” ……Life will go on

     

     

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  8. Tim Higham

    As a conveyancer, I have not had any phone calls from clients wanting to pull out. 5 exchanges are already planned for this morning too, so no jitters.

    The Government will sort things, the dust always settles.

     

     

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    1. RealAgent

      Lets just hope they weren’t having a lay in! That is reassuring to know however, thank you for posting.

       

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    2. Jasonh52

      I totally agree Tim, we must be positive, good agents & solicitors will survive, the rest…….

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  9. JSSoxted58

    The government now needs to find their backbone and stop overseas buyers from buying up UK property for profit – perhaps then prices will stabilise at affordable rates that everyone can buy not just investors – like many councils are now stating, you have to show a connection in the county that you are buying – why is this not the case for overseas buyers?

    The government needs to put a stipulation on developers – instead of 20% affordable they should be allocating 10% to the council and 10% affordable to try and reduce the housing crisis and this will then also stablise prices.

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    1. Property Paddy

      In case you are not up to speed UK has decided to leave the EU!

      Sterling has dropped making UK property a little cheaper to buy, except they aren’t buying because London is totally overpriced.

      Just thought you might like to know.

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  10. AgencyInsider

    Baby-face Osborne is very silent this morning. One can imagine that the phone lines out of No 11 are red hot as he calls every major bank to ask for a job. And finds no-one is hiring.

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  11. DayBook93

    Don’t panic Mr Mannering. The market will as in most cases be what people make it. In, out or shake it all about its up to you. Talk it up or spin it down, remember people will will react to YOUR confidence to give them confidence.

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  12. David Cantell

    “Don’t panic Mr Mainwaring….”

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    1. AgencyInsider

      Stupid Boy!

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    2. mrharvey

      Don’t tell him your name, Pike.

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    3. Property Paddy

      I was wondering when you would get round to that?

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  13. Shaun77

    The online boys are going to suffer. In a time of uncertainty, sellers will want to know they are with a proactive expert rather than a passive intermediary

     

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    1. agent orange

      Well said

       

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  14. Paul H

    I suspect that there will be some uncertainty for a while but the Germans and French are not going to cause self harm and within a set time we will no doubt hear Merkel, Hollande Juncker et al as well as other world leaders state how they would like to continue trade with the UK on terms agreeable to all parties, this should nulify a lot of uncertainty.

    It’s in everyone’s interest to move forward as quickly as possible without causing any harm to everyone’s economy and prosperity.

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  15. Trevor Mealham

    Brexit is a positive stance to allow us to rebuild our UK property market. Look at resident taxations and taxation of those buying property in the UK to profit from outside the UK.

    As the 2nd biggest EU economy, funds saved from going abroad can go back to the British people and our own housing running costs, new builds, commercial and help our own people in their own properties be they home or business premises.

    Under greater UK rules and regulations we can govern our own way forward in our favour outside 60% plus brussels governance.

    Although the money markets hit a low here today, other EU money makets sunk lower in their seeing our leave, yet our gain.

    Hopefully we can now encourage greater world relations and renegotiate EU trade agreements (that suit us).

    This is a big positive. With Cameron going and hopefully Osborne likely to follow, we should be able to again favour UK property owners be they home owners or landlords and tax those outside wanting in.

    Its also time to look at off shore tax havens closer to retain more UK funds in the UK cash flow.

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    1. PeeBee

      Not good for you, Mr M –

      It’s gonna well and proper bu99er up all your reliance on EU121, EU122 and EUFU2 for legal challenges to alleged ‘cartel-like’ shenanigans…

      …innit!

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    2. Property Paddy

      Mr Mealham!

      Seriously? You think leaving the EU is gonna buck up the UK property market. On what planet?

      Leaving the EU is a poor idea and your about to find out just how poor because it’s going to impact your income, your taxes and if your old enough to worry about it. Your pension.

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  16. Paulfromromsey87

    2 exchanges this morning already.  DON’T PANIC!!

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  17. The JB

    “We have to confront big decisions not duck them”

    Followed by “I Quit”

    Oh the irony.

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  18. Mark Walker

    Just had feedback from a foreign buyer to a mail out – take us off your mailing list, we’re not interested in the UK any more.

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  19. Woodentop

    So how are Purple Bricks shares coping this morning?

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    1. PeeBee

      As well as can be engineered, I’m absolutely sure.

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  20. PaulC

    London Property will be fine, Currency shift particularly if it continues will soften the blow there.

    Outside London, more tricky enviroment short term.

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  21. Special Agent 61

    Been around in this business since the 70,s and the one thing I picked up on early on in my career was the need to adapt, innovate and did deep when required.

    Good agents who understand their market, deliver great service and will go the extra mile always deliver no matter what gets thrown at them.

    Rather than dwell on the negatives of this outcome lets look to the future and the opportunities that will un-doubtably present themselves in the coming months and years ahead.

    As has already been said I think there’s going to be some very interesting times ahead.

    Good luck to us all!

     

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    1. PeeBee

      WELL SAID, SA61!

      (risks more ‘Dislikes’…)

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    2. Property Paddy

      Like shoring up the battlements on a sand castle as the tide comes in and finally it washes over the top. Do you mean that kind of innovation?

      Good luck is the very least we are going to need.

       

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  22. londoneye

    Forget the headlines and all the crystal balling gazing from the usual suspects.

    I have just looked at xe.com, the current Euro-GBP mid price is a shade under £1.24, this is higher than the entire period November 2008 to May 2014, (with the exception of a very brief period in 2012).

    Markets always over-react and this is no different. It’s how the City makes money!

    The EU will have to make up the shortfall when the UK leaves, who is going to make this amount up? Turkey? Unlikely they are want to join, not to pay in, but to take out. The bill will land once again with Germany, but even they might think this is one step too far.

    Europe is going to have to have a good long look at what it has become and it will have to change.

    We are the first to leave, but there are plenty of others who want to do the same. The stock markets in Europe have all seen bigger losses that we have in the UK this morning.

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  23. smile please

    Must admit the fear factor is helping us already 🙂

     

    Had a property down valued yesterday by 15k – managed to get buyer to meet half way which i thought was great negging from our staff.

    Seller flat out refused saying “Well its just an opinion of a surveyor, its worth £xxxx”

    Tried telling him market is no longer growing and its a bl**dy good offer.

    This morning he calls back all in a panic asking if offer is still on the table due to his concerns with the property market form the out result.

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  24. agent orange

    like always, its all in the delivery.

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  25. AgencyInsider

    So where is George Osborne? Quite extraordinary that the Chancellor has made absolutely no statement.

    Has he been told by Boris that if he utters a word he will be locked in a cupboard with Theresa May for the next five years? Has Sam Cameron buried him under the floorboards for helping to lose her husband his job? Is he in his bunker under the mountain, stroking his white cat and delighting that the Master Plan for Armageddon is coming along nicely?

    I think we should be told.

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  26. GPL

    So….. I’m working in my local area on Monday of this week then I saddle up on my Two Wheeled Beemer and do almost 1000 miles heading up the North East of Scotland near Aberdeen to list an interesting property for a client, then overnight in Banchory, then across to Sutherland, far North West of Scotland to list another interesting property for another client….. that old fashioned thing called Customer Service!
     
    Anyway, after almost 1000 miles I return home late last night…… and wake up this morning to find that the UK has been drinking or voting heavily all night and we have woken up with a monumental hangover….. and we seem to have misplaced the EU?! ……for good! ……and then President Sturgeon of Scotland is painting the facial Saltire and saddling up the White a Horse to rally the Tartan Troops for The Tartan Freedom Independence Campaign?!! …….really???! ……..more nonsense!
     
    So….. heads down in the UK Property Market and let’s plough forward…. this is an opportunity for Real Estate Agents to prove their worth!
     
    See! …….I posted without mentioning OnTheMarket.com! …….d@mn!!! I did it again!!

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    1. PeeBee

      WELL… bu99er me black and blue with a bourbon biscuit – look who has returned!

      Welcome back, GPL.  I sense flying sparks may be in the offing… ;o)

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      1. Robert May

        Peebee throws his hat in the ring to be the next PM!

        Pigs, biscuits are there no depths too deep?

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  27. joseygroseys

    I am a first time buyer (not London) I postponed exchange on my house until after the result (just in case) but was thinking we would stay in. Do I still buy?

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    1. Shaun77

      Yes. Next question…

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    2. Clarkuk

      Yes of course you do.

      IF you were that worried about being out of Europe you shouldn’t have offered on a property during a referendum.

      IF you’re going to live in it then what does it matter? a cheaper house next year isn’t as good as the house now, think of all that wasted rent money when you buy a house next year. say £800 per month is £10k in rent wasted.  If the market crashes yes you’ll pick up a better house, cheaper next year, but what if they tighten up lending criteria and you can only borrow 20k less? and you’ve put 10k into rental.  the same house would need be considerably cheaper next year.

      now is always the best time to buy.

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