Oh, the house price thing again

Our Director Ian Winslet posted this blog on house prices following last week’s referendum.

Our industry magazine, Inside Housing reported shortly before the referendum that over 78% of the Chief Executives of large housing associations believe Brexit would have a directly negative impact on their organisations. Their report, based upon National Housing Federation sources, also showed 73% of those chief executives believe leaving the EU would result in increased borrowing costs, while more than half said it would make it harder develop new homes. It went on to say that 92% of the chief executives said they would vote to Remain, with just two indicating they’d vote Leave.

We don’t know what they really voted of course (although we could collar them in Manchester next week I suppose?) but the market, never shy on these issues, shouted its view on housing prospects before the rest of us had finished our pain au chocolate and first grand crème of the day.

City Am’s Emma Haslett (you should follow her she’s good) was first in at 8.20am on Friday reporting Shares in Taylor Wimpey had lost a third of their value, falling to 128.9p in early trading and then later recovered slightly and closed at 147.1p. Persimmon faired less well falling 27.5 per cent to 1,520p in early trading finishing the day down at 1,249.81p or over 40% per cent. Given the number of housing association sale properties currently rising from the ground it’s a fair bet, (isn’t it?), that if they were listed they’d probably be down a few percentage points for a while too.

So, our development and corporate risk registers will be reviewed and cash flows revised. Prudent, of course, but isn’t it still anyone’s guess whether houses prices will drop at all?

The Telegraph reported about the Singaporean that pulled out of a £35 Million deal the day after the result was announced, others of chains breaking down and phones not ringing in those newly refurbished estate agents, you know the ones with bare brick and display screens.

Correspondents on the issue can be found everywhere. “There is an irony of course”, remarked one older voice on the wireless yesterday. “Young people, they all voted ‘remain’ but have the most to gain from house prices dropping.” Perhaps, but (come on), most likely in a market with rising borrowing costs and finance increasingly unavailable.

This I know because we’ve all been here before of course. The real irony is that my own ‘young person’, aspiring to own his first home at 23, is already old enough to remember it.