Share prices in housebuilding have fallen by approximately 20% following the UK’s vote to leave the European Union.
Housebuilders’ shares were in the group of those worst affected as the markets saw an adverse reaction to the decision along with the resignation of David Cameron from his position as prime minister.
However, the Home Builders Federation deputy chairman, Peter Andrew, reminded the market that the industry’s long term outlook remains sound and that it is too early to fully comprehend the full implications of the Brexit vote for housebuilders.
Mr Andrew added that what is clear is that following decades of undersupply, we now face an acute housing crisis with demand for new homes set to remain at a high level.
He continued by saying that the federation will carry on its work with the government and others to make sure that they can deliver the amount of homes needed for the country over the next number of years.
Meanwhile, Hometrack’s insight director, Richard Donnell, said that the Brexit vote’s immediate impact is likely to see a decrease in housing turnover and a rapid slowing down of house price growth as buyers await the short term effects on the financial markets and the wider economy.
He added that London housing market will feel the biggest implications of the decision to leave the EU as it is already facing headwinds and is fully valued.
On the other hand, Millwood Designer Homes managing director, John Elliott, welcomed the decision to leave the EU and believes that it marks ‘independence day’ for Britain.
Mr Elliott added that the UK’s home grown housing market is one of the country’s biggest assets and believes that this will now be much better off outside of the EU.
Property analysts have forecast an immediate deceleration in transactions, with some predicting an increase of 15 to 20% in labour costs.