Politicians and commentators have filled our newspapers and TV stations with views on June’s EU membership referendum in recent months, and now estate agents are wading into the debate.
A blog by Marcus Whewell, chief executive of marketing body the Guild of Professional Estate Agents, looking at upcoming influences on the London property market, warns that a so-called Brexit could cause a “significant adjustment”.
Listing possible consequences of the UK leaving the European Union, Whewell says it could “reduce the desirability of the location for international employees, create a flight of capital and could influence interest rates and lending policies”.
He also warns of “reducing general confidence in a city continuing to project itself on a world stage against growing competition”.
However, one London agent, Patrick Bullick of Stanley Chelsea, positively wants to see a Brexit, saying it can’t come soon enough.
He suggests leaving the EU would mean future UK governments would need to lower taxes to attract foreign investment, explaining: “In the property world, lowering Stamp Duty and capital gains tax will encourage property investors to trade more frequently. This will increase supply in London and the south east in particular, and help to ease the housing crisis.
“Prices might not rise quite as quickly and property may become less attractive as an ‘investment’ asset class. However, it will become more accessible to those who aspire to own their own home, plus it could create a greater emphasis on the investment of spare capital in new business start-ups rather than property – healthier for the long term strength of the UK economy as a whole.
“As we run up to the referendum on June 23 the scaremongering from both sides is causing a buying lull in central London, with prices softening, especially on the higher value properties.”
Meanwhile, Dominic Agace, chief executive of Winkworth, says that while talk of a Brexit may cause uncertainty and create more cautious transactions, investment also comes from beyond the continent.
He said: “The UK and London in particular has always had a draw for foreign investment, not only from Europe but much further afield, and I would expect this to continue whatever the outcome, especially as people come for many reasons, including schools and the lifestyle.”
Comments (4)
If out the country will continue to trade just as the rest of the world does that is not part of the EU. For and against arguments are not jumping ahead to a clear favourite.
It will all come down to immigration and national values?
My thoughts in a nutshell –
Brexit won’t happen.
Market will slow and cool before and immediately after EU referendum.
The property market will will continue as expected.
Demand up, supply proportionately lower. Migration up, most renting, rents go up, house prices go up even higher. Homeownership reserved for over 50s.
Few years’ time, maybe sooner, pretty significant drop in the property market to adjust itself back to normality (caused by London rents soaring to at least £2000 a month). But not as big a crash as 07/08.
Government targets everything BUT housing supply.
Buy-to-let landlords still make major money even when consistently hit by legislation changes.
Then lather, rinse and repeat for the next general election.
Staying in the EU will generate more anti landlord legislation as the over demand for property is the reason for “beds in sheds”, excessive rents, overcrowding, sub letting and provides the conditions for criminal landlords to thrive. These self generated conditions in turn will have politicians demanding rent control as they don’t want to build the number of homes demanded by those who need them, particularly social housing as cheap labour is one of the reasons big business love incoming migration.. We have already seen the increasing attacks by the conservative party on what would have been an open market. The government are constantly attacking the property industry because of over-demand that they have facilitated. We already see the middle east and Africa all wanting to be in Europe. The government have not been able to control the rate of EU migration and the UK now has a grossly overloaded infrastructure which has not been invested in at a suitable rate to handle EU migration. We are all experiencing the difficulties of the NHS waiting at times over a year for a minor operation, 3-6 months for hospital appointments etc. Staying in is being advocated by those who profit, which is understandable. There is little doubt staying in will cause more congestion, more overcrowded trains, poorer health care, more traffic jams until it all reaches saturation. We now see the EU befriending Turkey who are now blackmailing the EU due to the sad situation in Syria and the middle east.
Of course Brexit will affect the market. This market has a nasty habit of correcting every 7 years or so – it picked up exactly 7 years ago in this area – and it just waiting for a nice catalyst to trigger the correction. I personally will vote to stay but not for this reason. Others can make their own mind up but beware!
What exactly has this market has been relying on – stability, certainty and lack of events – certainly not high inflation and a wonderful upbeat economy like it has done in the past.
What will a Brexit bring?