With the EU referendum taking headlines on a daily basis, property developer Richard Carr examines how leaving the EU would affect the UK’s property market.
The problem with referendum’s like leaving the EU and events such as the general election, they create an element of uncertainty which generally has a negative effect upon the housing market. As was seen in the run-up to this year’s general election, with buyers and investors unsure on which policies would be introduced the market stalled somewhat until clarity was achieved.
Richard Carr expects a similar situation as the referendum draws closer, buyers and sellers will want to play safe until an outcome is reached.
Analysists are only able to forecast and predict what impact leaving the EU will have upon the property industry and a lot of it will come down to how the economy is impacted generally. However, a survey conducted by KPMG found that 66% of real estate experts felt that leaving the EU would have a negative impact on inbound cross-border investment.
However, a UK cut from its ties with EU regulation may appear as more attractive investment and therefore the property market would benefit.
Pros and Cons
It is believed that a Brexit could have an effect on property prices, especially as immigration would most likely fall. However, it would help ease the countries housing shortage.
Dave King, Head of Winkworth’s International department, explained: “There may be implications for UK buyers looking in mainland Europe should we exit the EU.
“If, following an exit, extra rules were introduced for British buyers such as visa or money checks then the process could be more difficult.”
Some online commentators are taking a firm view that leaving the EU would see price drops as large as five per cent, which would amount to around £11,000 to the average UK homeowner.
Time to leave?
Richard Carr’s position is at complete odds with this. He believes if we stay in the EU then sooner rather than later there is going to have to be a resolution to the ‘Greece’ issue, this is not something that should be cast to one side.
Also, the ECB currently has 0% interest rates and is about to embark on another colossal quantative easing programme, why would you want to be a part of that economy?
The UK will become the safe harbour for foreign investment without the threat every five minutes to give funds to the EU. The UK has the most sophisticated property market in the world, and it will become the Singapore of Northern Europe.
However, he believes the most important point is that the UK would be able to pick how many and what trades our immigrants must have and are needed. No longer will the UK be an easy touch because border controls will be re-established.