Brexit: Property deals fall through but 'no armageddon' in the housing market

Anecdotal reports from estate agents across the UK suggest there has been no initial panic in the housing market as a result of the Brexit vote in the 23 June referendum on the country's membership of the EU.

A Treasury analysis of Brexit predicted an 18% drop in house prices if there was a severe economic shock.

Some deals have fallen through as buyers take stock of what a Brexit means. One estate agent in Hampshire said he thinks local prices could drop by as much as 10% before the end of the year. But on the whole, there appears to be no sudden disaster — and some property professionals are even saying it is business as usual.

"We're not hearing armageddon," Mark Hayward, managing director of the National Association of Estate Agents, told IBTimes UK.

"Subsequent to the announcement on Friday, I have spoken to agents in England, Scotland, Wales, London and predominantly people are being cautious. I'm not seeing evidence of a wholesale stampede from sales that are currently arranged, so people are sticking there."

National estate agent haart said the number of buyers pulling out of transactions increased by 11% in the final weekend of June when compared with the previous year. But there were also 1,500 new buyers registered over the weekend after the referendum, the same level as in the previous year. Valuations, said haart, had actually increased.

"While it's true we have seen some buyers pull out of transactions due to the uncertainty caused by the Brexit vote, the effects haven't been as great as we anticipated and we expect this to be a small blip as people come to terms with the result and get their head around what a Brexit means for them," said Paul Smith, chief executive of haart.

Ryan Williams, senior consultant at McCartney's, an estate agent covering the Welsh Marches, mid-Wales and the West Midlands, said he had a few sales cancelled, in particular by "nervous cash-buyers". "Unlike the nervous kittens in the city, though, I don't think most buyers will panic," he said. "Expect an over-reaction in London but a more common-sense approach elsewhere. Life will go on."

Peter Woodthorpe, a director at Readings Property Group, an estate agent in Leicestershire, said he had seen "a slight reduction in new enquiries from both sellers and buyers", though this may be down to an earlier summer holiday for schools in the county. "We have not had a single sale fall through due to either the buyer or seller withdrawing," he said.

Neil Foster, director of Foster Maddison Property Consultants in the north-east of England, said nothing had yet fallen through because of Brexit. "New instructions have been more forthcoming this week now that homeowners can at least see where this is all headed," he said.

However, David Nesbit, who runs Hampshire-based estate agent Nesbits, said house prices could be 10% lower by the end of the year. "Some local buyers have withdrawn from proposed sales," he said. "A general lowering of prices must be anticipated, indeed a reduction is overdue to the hyped price of some properties by agents. Any price growth appears out of the question, however."

"To be honest, we have seen little impact so far," said David Lewis, associate partner at Stags, an estate agent covering Cornwall, Devon, Somerset and Dorset. "However, I would expect it will take some time for the market as a whole to fully understand the implications. Rather surprisingly, buyers are still making offers and viewing houses. I guess what we need to remember is that inevitably over half the population voted for a Brexit therefore presumably believed there would be little impact on the health of the UK."

John Frost, managing director of The Frost Partnership, an estate agent which operates to the west of London, said there had been little local impact after the Brexit vote and that "current deals are all progressing". "It is too early to give views on volume of new instructions coming to the market but the levels of supply have been low all year compared to the demand," he said.

Richard Banks of the estate agent G Herbert Banks in Worcestershire cautioned that it is still early days. "However I can advise that from our point of view – and please note we are a single-office independent agency dealing with mainly rural properties – we have not experienced any negative effect whatsoever," he said.

"Before Brexit, we had 19 properties that were under offer, and as of close of business on the following Tuesday [28 June], all of these deals are still moving forward. In fact, we have only added to the number of under offer properties since Brexit as well as receiving further offers on other properties."

"Since Friday, my agency colleagues report that all sales previously agreed remain intact and that there have been new enquiries this week both from buyers and sellers," said Lloyd Smale, a director at Drew Pearce estate agents in Exeter. "So initially the signs are of a relatively calm response with no jump in activity either forwards or backwards... it will no doubt take a few months for the dust to settle and any post-Brexit trends to be identified."

David Corrie, senior associate at CKD Galbraith, an estate agent in South West Scotland, said there had been two postponements of viewings, but the properties quickly went to other buyers. There had been no reduction in the number of viewings, he added. "Immediate effects so far would appear to have been minimal; market transactions in the pipeline before last Friday are continuing unaffected and new ones are still happening," he said.

"It would appear that it is largely business as usual, and that is the view being taken until the picture becomes clearer."

"Though the path ahead is currently unclear and short-term volatility is likely, it is too early to speculate what this means for house prices and volumes," said a spokesman for Countrywide, the UK's largest estate agency group, which owns brands such as Abbotts and Bairstow Eves.

Henry Pryor, a buying agent working at the top end of the property market, said "anyone thinking of buying a house now must be either brave or bonkers", citing the political and economic uncertainty surrounding the UK. He believes prices could slide by as much as 10%.

"Domestic buyers remain keen to transact and have the ability to do so," Pryor said. "There are still a lot of well-funded buyers out there, but they need some encouragement. Why buy today something that might be cheaper tomorrow?"

Trevor Abrahmsohn, managing director of estate agent Glentree, which handles prime London property, said the plunge in sterling's value and the recent fall in prices at the top of the market amid tax hikes is now giving overseas investors "the best part of a 50% discount". He said Glentree has had lots of enquiries from international investors since the Brexit vote.

"It's a huge inducement," he said. "Plus interest rates will remain low. Mortgage rates will remain low. So for the local market, that's good. Vendors will be more realistic with their prices, so they'll get less and pay less. It's a bloody good environment for an active property market."

He added: "I think it's a good time to invest. I'll be honest with you: where else are you going to put the bloody money... they're not building any more land, as Mark Twain was so famously quoted."