The 23rd June referendum on whether the UK should leave the European Union or not is looming. Uncertainty over the future is likely to make buyers and sellers cautious pre-referendum – you may recall the property market slowed right down ahead of the General Election, particularly in affluent areas where many were concerned about the mansion tax they might have to pay – but what would an exit mean for the UK property market? In reality, no one knows, (apart from bringing more uncertainty), but here\u2019s some food for thought.<\/p>\n
KPMG performed a survey earlier in 2016 which found that 66% of real estate experts thought that Britain leaving the EU would have a negative impact on inbound cross-border investment. If that was the case, London would be the most significantly affected. Data from Knight Frank shows that 49% of investors in Central London are foreign. Property in London is seen as a safe-haven asset\u00a0because the values are protected by liberal democracy and sheltered from the effects of crisis. Brexit would put an end to free-moving capital and could cause the end of this safe-haven protection; current investors may sell up and buy property elsewhere in the EU, and potential investors may not invest at all. <\/span><\/p>\n We certainly don\u2019t anticipate foreign investment drying up, though. Even if the UK left the EU there are many reasons that domestic investors would still choose to come here (education for their children, for example). <\/span><\/p>\n If the UK left the EU we would expect immigration to fall. As a result of that, we would also expect house prices to fall. According to eMoov, 21% of homeowners they surveyed also believe the value of their property will drop. eMoov attribute this to the uncertain economic future this country faces; people may choose not to make large financial transactions like buying or selling a house until they feel more comfortable with whatever consequences Brexit would cause. This could take a long time! If demand drops, house prices drop. It is estimated that the referendum itself could see homeowners who do choose to sell around that time potentially lose an average of \u00a311,000 from the current value of their property. If this happens, there is no guarantee it won\u2019t continue after the referendum if we vote for Brexit.<\/span><\/p>\n A poll by Bishop\u2019s Move found that almost half of the 1,000 contributors planned to wait until after the referendum to buy or sell a property, which certainly demonstrates that uncertainty is rife. However, there are only a few months until the referendum and while we may not be able to predict what effect Brexit could have on sterling, job incomes, interest rates, mortgage lending, and new property builds, it won\u2019t be long until the picture is made clearer.<\/span><\/p>\n Are you concerned about the potential consequences of Brexit for your property? We want to hear your views. Tweet us @Legal4Landlords and give us your take on Brexit.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" The 23rd June referendum on whether the UK should leave the European Union or not is looming. Uncertainty over the future is likely to make buyers and sellers cautious pre-referendum – you may recall the property market slowed right down ahead of the General Election, particularly in affluent areas where many were concerned about the […]<\/p>\n","protected":false},"author":7,"featured_media":11204,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[2148,1036,1428,1858,335,2115,284,176,95,2149],"yoast_head":"\nProperty prices<\/b><\/h2>\n