Nervous home buyers offered ‘Brexit clauses

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Nervous home buyers are being offered “Brexit clauses” allowing them to back out of deals if Britain votes to leave the EU, it has emerged, as as experts warn of an impending property crash.

Sources close to the situation say developers and agents are becoming increasingly desperate to sell homes as the market has significantly slowed over fears that a vote to leave could send house prices tumbling.

Last month George Osborne warned house prices could take an 18pc hit over the next two years if the UK votes to leave the EU, causing many potential buyers to hold off until after June 23rd.

George Osborne: Brexit will cause ‘significant’ hit to house pricesPlay!00:29

The Telegraph understands major estate agents including Savills and Knight Frank and developers including Barratt Homes, have been convincing worried buyers to proceed with transactions by writing the newly-devised agreements into their contracts.

The clauses are being requested by both overseas and UK buyers and mean they are not required to exchange contracts until after the vote. If they don’t like the outcome they can back out without loosing any money.

Such deals are said to be offered to people looking to buy both new-build and older homes.

Jeremy Raj, a partner at Wedlake Bell, a law firm which represents a number of private clients, said: We have had already had clients requesting we negotiate for them the ability to withdraw from purchases if there is a Brexit vote, and it is clear that the uncertainty of the outcome of the referendum has had an effect on the market already. Foreign and domestic buyers and sellers appear acutely aware that there could be a significant re-calibration of house prices post 23 June, and nobody wants to be caught out. As always, uncertainty and a lack of confidence are the enemy of market activity.”

Savills said it was not able to locate any specific cases where Brexit clauses had been offered.

Knight Frank and Barratt declined to comment.

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