The UK’s house price boom is set to come to an abrupt end after the vote to leave the EU was announced yesterday, estate agents and analysts said, predicting an immediate slowdown in transactions and a halt to the steep price rises of recent years.
Price growth is set to go into reverse, meaning that prices will be flat over 2016.
The market expects price falls of 3-5% in both 2017 and 2018. Others have predicted a more drastic fall in house prices. Analysts expect buyers’ and sellers’ uncertainty to drive an initial slowing of the market, while the longer-term fallout will be determined by how severely Brexit affects the economy. London is expected to be most severely affected.
House price growth is already weak and running in low single digits in central London areas, and modest price falls now appear likely in higher value markets as prices adjust in the face of lower sales activity,” said Mr Donnell.
Banks such as Citigroup and JPMorgan warned in the run-up to the referendum that they might have to move jobs out of London in the event of an Brexit. This has large potential implications for Canary Wharf, home to thousands of their employees.
Office rents in the capital will drop, potentially by as much as 18% in the two years after the UK activates its Article 50 exit from the EU. This is based on an estimate that 100,000 jobs could be relocated out of London.