Is the EU referendum already starting to affect property markets?

According to the Royal Institution of Chartered Surveyors (RICS), the forthcoming EU referendum is already affecting property markets with uncertainty creeping into decision making.

Slowdown

Richard Carr

Is Brexit good for property?

Although there has been plenty of positives coming out of the industry over the past months in relation to increase planning applications and new funds to help social housing, the country’s housing shortage remains one of its major problems.

As a result of the increasing uncertainty around the decision that will be made following the referendum, residential investment transactions in the residential sector have slowed and limited house buying transactions across the house price spectrum.

However, there’s no need to panic, yet.

“This is not unexpected as there’s usually a slowing of residential transactions before any national poll. After an election vote we typically see the residential sector recover and bounce back as stability and confidence returns,” the report says.

“Should the UK opt for a Brexit, we could assume that uncertainty could linger while the UK Government negotiates new trade deals and relationships with the EU and third countries,” it adds.

High value

The problems are being felt at the top end of the market as those properties in the middle to lower end of the market are under domestic transactions, whereas a significant number of higher priced properties are purchased by EU and non-EU individuals who are being put off by the country’s looming decision.

The report suggests that high value properties in London and the South East could be under less demand from EU and non-EU individuals if the UK was to leave the EU. This release in pressure is likely to see prices decreases according to the report.

Uncertainty

There would also be uncertainty over the renegotiated package if the UK remain in the EU and uncertainty over the exit negotiation period and potential trade deals.

“Anecdotally, this uncertainty has already had an impact on decisions in property markets and heightened the perception of risk attached to the UK. Investors are hesitating, occupiers re-planning their footprints, and building pipelines are slowing,” the report says.

Richard Carr believes the UK should be bold and protect its future by voting to the leave the European Union. He believes the UK is of such high value to Europe that trade would not only maintain but increase as a result.