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Trade bodies react to Brexit vote: ‘Prepare for volatility’

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Mortgage and property trade bodies say the Brexit vote will cause volatility in house prices, mortgage rates and rents.

Building Societies Association chairman Dick Jenkins called on the industry to stay calm.

He says: “The UK population has made its decision and it is important that the focus returns quickly to business as usual.

“The process of leaving the EU will be a relatively slow one, taking around two years.

“Today and for the foreseeable future nothing changes in the building society sector: Mortgages are available and retail savings are safe, exactly as they were before the Referendum.

“The greatest concern for the UK economy and something that affects financial market sentiment and ultimately interest rates is uncertainty.

“The primary job for the Government and politicians generally is to unite to ensure that they do everything possible to counter this and set the tone and framework for the UK Economy to thrive.”

A Council of Mortgage Lenders spokesman says: “In the short term, people’s attention will be on interest rates and what impact this will have on mortgage costs. While markets are bound to react to the news, the question will be how long it takes for them to settle. We know the authorities will be mindful of this.

“In the medium term, there will also be interest in the extent to which housing transactions are affected by economic uncertainty, and whether this will impact on house prices. The more quickly markets resettle, the lower the impact on the housing market is likely to be. However, any prolonged disturbance would inevitably impact the housing market.

“For lenders, the treatment of customers and of mortgage applications will be business as usual. People who have received mortgage offers will not see them affected. People facing financial difficulty will continue to be treated constructively and positively.

“Lenders remain open for business as usual. Mortgage pricing is unlikely to react instantly, although pricing may be affected in the foreseeable future because of the effect on lenders’ cost of funds arising from the perception of economic uncertainty. How long this lasts will depend on how quickly markets resettle.”

In a joint statement, Association of Residential Letting Agents David Cox and National Association of Estate Agents managing director Mark Hayward say: “The outcome of today’s EU referendum will create a period of uncertainty among homeowners, buyers, investors, landlords and developers.

“We can expect international investors to look a lot harder at the UK as a market; this will have a consequential impact upon the house building sector as investment may be stalled.

“In the short term we believe that both prices, and rents, will remain stable, but we cannot be certain about the next quarter as political instability, and market unrest, could lead through into prices in the housing market.

“We believe that the UK housing market is resilient, as is the supply chain that drives it.

“But as we indicated in our Brexit report last month, the bigger impact may well be in the skills necessary to drive UK housing development, and this is now a major concern for UK buyers and renters.”

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