Brexit triggers housebuilder share price falls

In the aftermath of the UK’s vote to leave the European Union, housebuilder share prices fell by around 20 per cent, on the back of figures showing a seven-year low in sector output.

Housebuilders’ shares were among the worst hit across the FTSE 100 as the markets reacted adversely to the vote and the resignation of the Prime Minister, prompting warnings of house price deflation.

Speaking on the day after referendum Richard Donnell, insight director at Hometrack, said:

“The immediate impact of Brexit is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers wait and see what the short term impact is on financial markets and the economy at large.”

He added:

“The decision to leave the EU will be most keenly felt in the London housing mar- ket, which is fully valued and already facing headwinds.”

Paul Higgins, CEO of the HomeOwners Alliance commented:

“No one knows the full impact of this momentous vote yet, and in the short term the only certainty is uncertainty. This is bad news for financial markets and will probably impact interest rates longer term, so mortgage holders will want to watch this space.”

“House sales fell ahead of the referendum and people will continue to watch what unfolds before making any big financial decisions. We can expect the rate of house price growth to slow nationwide, while in London the limited housing supply could reduce the impact on house prices.”

Melanie Leech, chief executive of the British Property Federation called on the Government and the Bank of England to stabilise the situation:

“The effect of the vote has been immediate, and we are already seeing market turbulence and a fall in the pound. The priority must now be to stabilise the position and maintain confidence in the UK.”

She added:

“There are many unknowns ahead. Our priority is that Government maintains focus on existing national priorities such as housing and makes swift decisions on major infrastructure projects, such as airport capacity and maintaining momentum around HS2.”