On 23rd June 2016, the British population will have the chance to decide whether or not we want to remain in the European Union. There has been endless debate in the lead up to the vote from those who want to ‘Leave’ and those who think ‘Britain is stronger in Europe’ and there is speculation about the effect it may have. One such question is what impact this may have on the UK’s property market.
Whilst some analysts believe that leaving Europe would have little to no effect on the London market, others speculate that it could have a negative impact on people’s attitudes and financial fears regarding a walk out. Consequently, the mind-sets will impact the actual housing demand. There’s no doubt that leaving will impact public confidence in a number of areas and this will cause major distress for certain industries and businesses across the UK.
All this insecurity in the housing market could be heightened if Britain was to leave Europe as future housing projects could be left in limbo, with new projects left on the sidelines – meaning potentially prices elsewhere would be increased in order to cater for the losses. It is apparent that developers have been working hard to meet the housing shortage demand over the past few years to meet Government plans to get the UK out of the recession. Across the country, developments have sprung up but whilst these new estates have been beneficial to the economy, there has already been some noticeable decline in residential and commercial property investment ahead of the referendum. Chief Executive Alison Platt of Countrywide, Britain’s biggest estate agency, stated, “We expect the housing market to slow in the second quarter after the surge in buy-to-let activity in the first quarter and reflecting challenges from the political and economic uncertainty in the lead up to the EU referendum in June.”
Prior to any large event that could drastically affect the economy, there are many arguments presented in regards to the property market in order to sway votes to either party. This uncertainty amongst both buyers and sellers makes everyone extremely cautious. Dominic Agace, CEO of Winkworth commented, “We saw this last year with the General Election, with a quieter period in terms of transactions in the lead up to the vote, and so we anticipate a similar effect in the lead up to Referendum. However, the UK and London, in particular, has always had a draw for foreign investment, not only from Europe but much further afield, and I would expect this to continue whatever the outcome, especially as people come for many reasons including schools and the lifestyle.”