Brexit will cause significant drop in Hampstead house prices

Uncertainty and falling buyer confidence following the referendum result have already seen buyers who were mid-transaction requesting discounts or even pulling out of transactions altogether.

Property solicitor Sam Smith of Streathers in Crouch End said: “About one in 10 deals have fallen by the wayside since Brexit, and it’s early days, there are a number of deals where it’s gone a little quiet so I think a lot of people are biding their time.

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“We’ve also seen about 15 per cent of our clients renegotiating on purchase prices since the referendum result.

“In some cases we’ve seen fairly substantial discounts of £100,000, or about 10 per cent.”

Mr Smith said the firm deal mostly with properties of under £1million, which were not affected by last year’s stamp duty changes, so many of these price adjustments and disrupted sales can be directly attributed to the referendum result.

According to buying agent and commentator Henry Pryor reductions are likely to be fully factored into the market by Christmas.

“There have always been more people that have to sell than people who have to buy – the three Ds continue to generate business for estate agents.

“But it’s very difficult to think of people who must buy before Christmas, most people will rent unless you give them a damn good reason not to.

“I’m thinking prices will be down 10 per cent by Christmas.”

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Aree Rand of Knight Frank in Hampstead agrees. He said: “The stock that we had on may have been a bit punchy in terms of price.

“What we’re seeing now, slowly, is that vendors are more open to adjusting their pricing to the tune of 10 to 15 per cent.

“This was starting to happen before the referendum but Brexit has confirmed it.”

There were rumbles that the property market was heading in that direction long before the referendum, particularly in high value areas such as Hampstead.

More than a third of Hampstead properties sold in the first quarter of this year had an agreed sales price of 10 per cent or more below guide.

“Our housing market was already topping out before June 24. We’d already reached peak property but this is going to exacerbate the fact that prices were slipping back at the start of this year,” said Mr Pryor.

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Vendors had yet to keep up with the new, less frothy market conditions – the Rightmove house price index for June showed asking prices in Camden dropped only 3.2 per cent year on year – so the post-Brexit crisis of confidence may be the wake up call the market needs, rather than a full-blown catastrophe.

As Mr Pryor said: “At least Brexit will clear out all the people who couldn’t hear the mood music before June 23 and just leave people who actually want to sell.”