Economy 24 June 2016 Will Brexit hurt house prices? The winners and losers explained First-time buyers could have a chance to buy in Brexit Britain, but only if they have a good job. Getty Sign UpGet the New Statesman's Morning Call email. Sign-up Britain has voted for Brexit, and the effect on the financial markets has been instant. The FTSE100 plunged and the pound was in freefall against the dollar. But many voters will be wondering abotu something closer to their hearts - their home. A chorus of economists warned that quitting the European Union would hurt house prices, and indeed there were signs even in the run up to the vote that the market was slowing down. Unlike the quicksilver movement of the pound, house prices are more likely to be measured over months, or even years. But with house prices at record highs in parts of the country, even a small percentage change can mean thousands of pounds difference to a buyer or seller - and make homeowners feel a lot poorer. Politicians know this, which is why successive governments have failed to curb the upwards march of house prices, even as wages fail to keep up. House prices in Brexit Britain As the quarterly housing reports arrive, we can expect a sharp drop off in house prices. Richard Donnell, Insight Director at property analysts Hometrack, said: "The near term prospects for the UK housing market now look very uncertain. "The immediate impact is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers adopt a wait and see the short term impact on financial markets and the economy at large.” London house prices - widely viewed to be nearing bubble territory - will be most likely to drop off, he predicted: "History shows that external shocks can reduce sales volumes by as much as 20% with sales volumes already down over the last year." In the capital, house price growth has been buoyed up by foreign investors looking for a safe haven, and the city's reputation as a financial hub with well-paid jobs. Both these roles look likely to diminish. House prices across the rest of the UK tend to take their cue from London, so a sharp drop off will knock confidence elsewhere. But Capital Economics economists Hansen Lu and Ed Stansfield think the prime London market could bounce back, because owners are secure enough not to have to sell up. In a statement, they said: "If we are right that a recession will be avoided and mortgage interest rates will not spike higher, there is little reason to expect the referendum to act as a catalyst for a housing correction, despite that fact that house prices are so high." Lower house prices - the winners and losers In theory, leaving the EU should be a boon to Generation Rent - the young professionals and working families who are now trapped in an expensive private rental market. But unfortunately it's not that simple. Since the financial crash, mortgage lenders have introduced tough new rules about affordability, and usually limit your mortgage size to 4.5 times your earnings. Anyone in a reasonably well-paid job, who can put down a sizeable deposit, may find the Brexit market is a buying opportunity. But if the financial shock affects employment and wages as well, it may be landlords with ready cash who are the biggest winners, as they were after the 2008 property crash. And anyone who has already bought may find their hard work less rewarding if house prices slump and they end up paying off a mortgage worth more than their home's current value. In short, there's no doubt that house prices are unaffordable in many parts of the UK. But a sudden slump will hurt more than it helps. What can I do if I'm already buying? You can be sure that any seller is going to try to cash in on their pre-Brexit price. But the earth has shifted, so it's always worth negotiating. One first-time buyer who is midway through a transaction in a London commuting town, told The Staggers: "I think after weeks of hassling lawyers for moving slowly, we'll now take our time to work things out - and maybe look at renegotiating!" › How did different demographic groups vote in the EU referendum? Julia Rampen is the digital night editor at the Liverpool Echo, and the former digital news editor of the New Statesman. She has also been deputy editor at Mirror Money Online and worked as a financial journalist for several trade magazines. Subscribe For more great writing from our award-winning journalists subscribe for just £1 per month!