Risk of house price drop if we exit Europe?
As the UK prepares for the EU referendum on 23 June, 2016, there is uncertainty about what a Brexit would mean for the property market. Would exiting the EU result in a property price drop? Currently this uncertainty is impacting the property market.
“If we vote to stay in, it’ll be back to business relatively quickly. If we vote to leave, I don’t think anyone has quite worked out what all that means, other than more uncertainty,” said Richard Donnell, director of research and insight at property analysts Hometrack
“As far as domestic supply and demand are concerned, I’d say there aren’t that many major risks, other than if interest rates go up faster or more than currently expected,” said Stephen Williams, an equity analyst at the investment manager Brewin Dolphin, to IBTimes UK. “We’ve still got this demand and supply imbalance and I think the demand is still there, supply is still limited. From a domestic point of view, I don’t think Brexit is going to have a significant impact at all.”
“Long-term, I can’t really see the material difference,” he said. “But, if the government wants to build more homes, wants to create a stable housing market environment with more mortgage lending, more investment in housing, attracting external sources of investment into housing… then uncertainty and turmoil mean you might not get as much investment as you necessarily might get with stability.”
Which ever way the vote goes it is hard to predict the impact on the property market. What we might see is a slowing of transaction up to and after the referendum then back to normal as the issue of lack housing supply continues.