How a Brexit will affect the UK property market
On June 23rd Britain will have a chance to decide whether or not we want to stay in the European Union. There’s been endless talk in the lead up to the vote from both sides of the argument with some speculating a positive outcome from an EU departure and others fretting about the knock on effect it could potentially have on the nation as a whole. One such factor that has got people debating on both sides is the issue of property and just how impactful could a Brexit have on the UK’s property market.
Whilst some analysts believe that an impending Euro exit will have little to no effect on the market, particularly the London market, many have conceded to the fact that it could still affect people’s attitudes and financial fears regarding a walk out. It’s this uncertainty that could actually lead to a negative effect on actual housing demand following the referendum. There’s no doubt that leaving will impact public confidence in a number of areas and this is a major concern for certain industries and businesses across the UK.
There is still plenty of uncertainty in the housing market and it’s far from strong at the moment. Many are concerned that a Brexit will shake things up even further knocking an estimated 2% off GDP and negatively affecting house prices. Both developers and investors will certainly feel a great level of uncertainty if the UK leaves the European Union which could then leave many future housing projects in doubt. And with new building projects left on the side-lines, it’ll mean other prices will have to be raised in order to cater for the losses.
There’s no doubting that developers have been working hard to meet the housing shortage demand, particularly since the previous Governments plans to build the UK out of a recession. Across the length of the country developments have sprung up, approved by changes to local housing legislation and easing of Green Field building laws. New estates, such as Strata Home’s Whetstone development, are beneficial to the economy, but there has already been some noticeable decline in both the residential and commercial property investment market ahead of the referendum. Confidence is low and so is the demand which could lead to house prices increasing even further.
Cities like London are the most concerned with a suppressed market but it’s a decrease in supply that is likely to hit all regions no matter how affluent an area may be. But it’s an exit that could also hit areas of employment in the housing market where large development groups already employ large numbers of EU workers. Immigrant workers have been able to fill the labour shortage in recent years, however, a Brexit could result in the weakening of the pound meaning that many foreign workers may decide to try elsewhere. A possible consequence of this is that it will once more put unwanted pressure on the housing market and even push up house prices.
