Brexit: estate agents predict a slow summer and house price falls - but first-timer buyers could benefit from vote to leave the EU

The London housing market is reeling from the shock of Britain’s referendum vote to quit the EU, say estate agents, who predict a long, slow summer of business ahead, with first-time buyers benefiting from lower house prices.

These jitters will continue until David Cameron’s successor as prime minister has been appointed — possibly even longer, as the UK negotiates the terms of its divorce from Europe, the experts add.

“Would-be sellers have put any decision to sell on hold and the Brexit vote will see that indecision continue,” says Nick Leeming, chairman of Jackson-Stops & Staff.

Richard Donnell, insight director at Hometrack, anticipates fewer transactions and a “rapid deceleration” in price growth, currently running at 13 per cent in the capital.

“History shows that external shocks can reduce sales volumes by as much as 20 per cent,” he points out. Economists agree that Londoners’ homes are probably worth less today than they were this time last week, before the vote.

KPMG predicts that nationally prices will fall about five per cent and “slightly more” in the capital, while JLL calculates there could be a 10 per cent price drop in commercial property by 2018, and also feels London is particularly vulnerable, given how unaffordable its property already is and its reliance on overseas investors.

One school of thought is that sterling’s fall against the dollar could tempt foreign buyers into London.

But Robin Paterson, joint chairman and chief executive of United Kingdom Sotheby’s International Realty, says areas traditionally reliant on EU nationals “such as South Kensington and Angel” may well see price falls.

Major challenges also lie ahead for house builders.