In a surprise to many around the world, a Brexit was approved by a vote of 52% to 48%, battering the British pound and sending stocks tumbling.
While many are still awaiting the fallout of the British decision to leave the European Union, speculation on the impact of the exit on the housing market had already begun in the weeks leading up to the vote.
George Osborne, the U.K. finance minister, had warned that house prices could slump by as much as 18%, as the U.K. economy grapples to keeps its head above water.
More:For Foreign Buyers, Times Are Getting Tougher
While this will be bad news for homeowners, it could present opportunities for those thinking of buying — especially since the average price of a home in the U.K. is at a record high of $299,810, according to the latest available figures from Nationwide building society.
This is the same story for the luxury market. While average price growth in the most expensive neighborhoods in London — including Knightsbridge and Chelsea — has turned negative on the back of higher sales taxes dampening demand, the average cost of a home in these areas is still extremely high. According to Christie’s Real Estate, London’s upmarket homes are the third most expensive in the world per square foot — after Monaco and Hong Kong.
Wealthy foreign buyers could scoop up some bargains, though. Some brokers predict that dollar-backed buyers could flood back into the market with the slide of the sterling, making properties much cheaper for them.
More: Expectations on U.K. House Price Growth Slips to Three-Year Low Ahead of Brexit Vote
A report from think-tank Economist Intelligence Unit predicted last week that the uncertainty caused by a “leave” vote would upset consumer and market sentiment, causing a 14-15% devaluation of the pound against the U.S. dollar.
As a result, Trevor Abrahmsohn, managing director of Glentree International, a London-based brokerage, has predicted that prices in some of the most exclusive parts of London, such as Mayfair, could become 50% cheaper for dollar-backed buyers from the U.S., Iran, Russia and the Middle East among others than during their peak in 2014.