As the countdown to the EU Referendum continues, all thoughts inevitably turn to how a Brexit could affect the UK. From immigration to the pound, if the decision is made to leave the EU there will be far reaching consequences for us all.
So, how could this affect the property market? Many commentators, particularly Halifax, have recently stated that the uncertainty of the outcome is already causing a slowdown in the property industry. Without knowing which way the vote will go, investors are cautious about property. If we decide to stay within the EU, this uncertainty could soon dissipate as we resume the status quo.
However, house prices are still rising and demand outstrips supply significantly. We’ve written recently about the New Housing and Planning Bill and how this could affect the property market positively, but the big issues surrounding the lack of homes for first time buyers and an ever-growing rental market remain.
What will happen to the property market if Britain leaves the EU?
No one knows what will happen if Britain choses not to remain a member of the EU. All outcomes remain hypothetical, and range from the impact of changes in immigration, a decline in the value in the pound and demand from overseas investors.
If the pound does suffer a decline this may well decrease the attractiveness of the property market. House prices will be affected throughout the UK, as would commercial property values. However, a longer-term fall in the pound could actually increase the interest in property from overseas investors.
There is also the possible impact of migration. A key issue in the referendum arguments on either side, a reduction in immigration may will help Britons in unemployment and decrease the strain in public services, but will also adversely affect a construction industry reliant on skilled European workers.
The UK certainly faces a momentous decision in June, and we’ll be watching closely to find out the full effect on the property market.