Housebuilders on the FTSE are recovering some of the deep share price losses in the wake of the vote for a Brexit in the EU referendum. But the scale of the collapse of their share prices since the vote "is consistent with a 5% fall in house prices next year", according to an economist.

As of 9am today (28 June), Persimmon shares were up 4.58% on the day, though still 33% below their price on 23 June, polling day. Bellway was up 3.81% on the day, though down 33% since 23 June. Barratt Developments shares had lifted 2.91% in the first hour's trading, but had slumped 36% since the referendum. It was a similar story with other major housebuilders listed on the FTSE, who were making a small daily share price gain after severe losses.

Samuel Tombs, chief UK economist at Pantheon Economics, said the sharp fall in the share prices of housebuilders implies a 5% drop in house prices in 2017. "The markets are factoring in a pretty big hit to consumer confidence," Tombs told IBTimes UK. "That means that demand to move home suddenly falls. Markets are also factoring in a renewed credit crunch to some extent. Certainly not on the scale we saw during the financial crisis.

"But looking at market indicators at the moment, banks are going to find it harder to fund themselves, it's going to be more costly, and they are going to pass those additional lending costs on to consumers. House prices are very sensitive to changes in mortgage rates. The drop in home construction equity prices is reflecting all of those factors really."

Britain voted to leave the EU by 52% to 48% in its referendum. Since then, markets and sterling have plummeted, the UK has lost its AAA credit rating, and some economists expect a recession to hit by the end of the year. Article 50 of the Lisbon Treaty, which governs the formal two-year long exit process of a state from the EU, has yet to be invoked by the government. Prime Minister David Cameron, who campaigned for remain in the referendum and will step down by September, has said this must not be rushed.

Tombs said markets are "extremely volatile" at the moment and noted the slight pick-up in homebuilder share prices again. "I think it's perfectly possible that the markets are very reactive to Brexit now and the economy might not struggle as much as some of the thinking if there is a last-minute political deal... that comes through in the next couple of months," he said.

"I think clearly David Cameron has waited to activate Article 50 on the hope that there could be a renewed offer from the EU that could then be put to a second referendum. It's a very volatile situation and the markets will move very quickly with the politics, which is fluid. This could look very different in a couple of weeks' time. But as things stand, the markets are certainly factoring in a decent fall in house prices next year."

A Treasury analysis before the referendum suggested that a severe economic shock would cut house prices by 18% across the UK. But David Miles, a former policymaker at the Bank of England who called the 2007 property crash, cast doubt on the forecast, pointing out that house prices have recovered from the financial crisis, which was a far greater shock than that modelled by the Treasury.