Professor Michael Ball, Professor of Urban and Property Economics at Henley Business School has published his opinions on Brexit and what this means for international and UK housing markets; housing supply, planning and the housebuilding industry; regional economies and infrastructure provision and the private rental sector as the story unfolds. 

Overall impact

Commercial and residential markets were already topping out. Brexit will make this decline worse. Real estate markets tend to overshoot, so short run effects will probably be the worst, but will lead to a new lower equilibrium level of prices and supply.

Other comments

Ball went on to give more details on what he expects:

• Lower long-run prices because of poorer growth, less employment, weaker confidence, higher interest rates & greater volatility.
• House prices could easily drop by a fifth or more – depends particularly on consequences for long-term borrowing rates, their volatility & credit availability.
• Foreign investors in residential property will go down – they have already been withdrawing. For them the political risk has increased, as well as economic factors above, which a lower pound is unlikely to offset.
• Major commercial projects already being put on hold; same for residential. Expect far more to be called to a halt. Infrastructure schemes will be cutback as well.
• Very bad news for construction & property industries.
• Resultant significant negative effects on aggregate investment & consumption (via house price wealth effect) could be key trigger of recession.
• Non-London cities will be badly hit as less incentive for businesses/people to decentralise/avoid London because of affordability issues.
• Hopes to increase housing supply likely to be dashed as resistance to greenfield building likely to be emboldened by Vote Leave.
• Prospects for the private rented sector poor, especially outside London. Immigrants have been important source of demand; while house price falls & volatility will deter investors. Vacancies likely to grow if immigration is lowered. Higher rents long-term if residential seen as a much poorer investment.
• Impact of property market decline will adversely affect public finances.
• Haven’t left EU yet & don’t know final settlement but short-run impacts are here now and will multiply as the year progresses.

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CTMfile take: Brexit is such a good idea, see for more impacts.