Industry reacts to vote to leave the EU

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Industry reacts to vote to leave the EU

The value of the pound as well as shares in the UK’s major house builders are in freefall after the UK voted to leave the European Union.

While Prime Minister David Cameron has stated Article 50 of the Lisbon treaty, which starts the two year countdown on leaving, won’t be triggered until at least October, markets have reacted badly to the news.

Shares in Barratt Homes, Persimmon Plc and Taylor Wimpey have all fallen by over 20% as of 9am, with the Pound down 6.4% on the Euro, 9.8% on the dollar, and 13.77% on the Yen. The Pound now sits at it’s lowest level since 1985.

Shares in conveyancing technology firm ULS have also fallen 6.14% with the FTSE 100 as a whole down 6.9% in the first hour of trading, a fall more severe than the worst days of the 2008 recession. The fall is likely to have dire consequences for UK pensions.

Bank of England governor Mark Carney has announced the central bank will pump £250 billion into the market to prop up sterling, with banking stocks also falling heavily by up to 30%.

 

Law Society president, Jonathan Smithers, said: “We did not take a stance on whether Britain should leave or remain in the EU – that was because we are a professional body and our membership has a diverse range of views. Instead we sought to provide facts to inform the debate with a focus on the impact on legal services.
“It’s clear that there is an enormous amount of work to do in the coming months and years to establish the terms of withdrawal from the EU and scope necessary changes to domestic law. The UK will also need to resolve issues relating to its trading relationship with other parts of the world, specifically in terms of international trade agreements.

“Amid all the uncertainty it’s important to emphasise there is no immediate change to anyone’s legal rights or obligations.

“It’s also important to say that the law of England and Wales retains its international commercial appeal and England and Wales remains an attractive and stable jurisdiction, with a high quality legal profession, internationally respected courts and the best law firms in the world that have attracted clients from across the globe for many years.

“We do hope England and Wales will continue to be the global centre for legal excellence and we will be offering support and guidance at this time of change and playing our full part in aiding a transition into the post-EU era.

“We will continue our work in upholding the rule of law and enabling access to justice; supporting law reform and the legislative process; and providing information to the solicitor profession and the public as the UK’s new relationship with the EU takes shape. Our Brussels Office will continue to provide a base from which we, along with the other UK law societies, can seek to influence and inform an orderly transition.”

David Brown, CEO of estate agents Marsh & Parsons, said: “Whatever result you were hoping for on a personal level, it’s hard to argue against the fact that this result will bring further uncertainty and also creates far more questions than it answers in terms of what happens next as Britain extricates itself from the continent in terms of procedures and processes. It’s also worth noting that if the pound weakens against the Euro as some have predicted, then it could lead to a significant increase in overseas property purchases – not bad news in itself, but unlikely to have been among the intentions of many ‘leave’ voters.

“On the plus side, it makes the picture clearer for any individuals who were sitting on their hands, waiting on the outcome of the result to make their move. It’s also worth putting things into a wider perspective. Irregardless of the referendum result, there is still plenty of pent-up demand in the UK housing market and a leave vote doesn’t change that overnight. When you think back to before the financial crisis and the volume of transactions we were witnessing on an annual basis, there’s clearly scope for further improvement. The decision to leave doesn’t alter the fact that plenty of people have to and still want to move.”

Josh Morris

Josh is the Journalist for the Today's Group and writes many of the articles for Today's Conveyancer. He graduated with a degree in Physics from Cardiff University in 2009 before training as a journalist. He has previously written for The Times, The Mirror and The Daily Express.

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