Estate Agents fear leaving EU
A recent Report by the National Association of Estate Agents (NAEA) and Association of Residential Letting Agents highlights the likely impact that the impending EU referendum will have on the property market.
The report not only highlights the current uncertainty that the impending EU referendum is having on the property market. It also outlines what the impact is likely to be if the UK votes to remain or exit the EU.
The headline figures that UK homes will be worth less if the Country votes to exit the EU. So in 2018 it is predicted the average price of a home would be £300,800 if we exit, rather than £303,000 if we remain. In London this would be or £591,700 rather than £599,200 if we remain. So the cumulative loss of wealth for all in London alone, would be £26.5billion – which is a startling figure. So overall everyone would be poorer in terms of their property wealth.
The report also highlights a major concern to the house building industry, where it confirms that there would be a major skill shortage for the house building sector which currently employs 4.7% of EU nationals in the workforce. The house building industry is back building again and has recently stated that it will build the 1million new homes demanded by the current Government in this parliamentary term. If an EU exit stops workers coming in, then this may well be hampered.
It suggests the impact on the rental market would be minimal in the first few years, but that if a curb was placed on immigration then there would be a noticeable reduction in demand for rental properties, knocking into this important market place.
In the event of an exit, the general reduction in immigration would weaken property demand. At the same time many banks including Goldman Sachs and Citi have forecasted that the exit vote would weaken sterling by as much as 20%; which could mean that ‘foreign’ investors would see UK property as cheaper; however for the UK population this just means going on holiday or investing in property in another country, would be 20% more expensive.
The Report makes interesting reading and Elmhurst have been watching the recent debates on the EU referendum with a keen eye. It is good to see reports with some more detail surrounding properties and buildings, so that voters can have a more informed choice on the 23rd June.
Stuart Fairlie – Head of Technical
For the Full report see here: http://www.naea.co.uk/info-guides/housing-research/