Would BREXIT affect the UK housing market?
I have thought about this a lot recently and I do believe there will be a short term effect on the market. As with any time of uncertainty: general elections, budgets, referendums, stamp duty changes etc. there is always some effect on the property markets and it is usually a slowdown. People do not like change and their reaction to change is to hold fast and not make any rash decisions. Itâ€™s human nature.
However, once the time has passed and the referendum has been held, whatever the outcome, I do believe that the market will resurface and be buoyant once more. The fact is people have to move for various reasons and the South East is where the economy is the strongest and thus draws people to it.
I think all of this uncertainty is leading to a short term lack of stock and a slight reluctance by all but the hardiest developer to over commit.
With everyone holding tight and waiting we could potentially see a surge of properties onto the market towards the end of the summer which could have the potential to see prices taking a bit of a knock; supply and demand.
This is purely my take on the situation and I hope I am correct but Capital Economics do also seem to be of this opinion as quoted today on Property Industry Eye. They state that a vote for Brexit is unlikely to trigger a collapse in the housing market or the general economy and that it is the period up to the referendum that is causing uncertainty.
They also state that housebuilding, however, could be hit hard by Brexit due to the high proportion of overseas workers who are in the construction industry. Berkeley Group, a major house builder, has been quoted as saying that half of their sub-contractors are from Eastern Europe.
Reading that Capital Economics say there few signs of a looming recession is quite heartening and the fact that they say wages and house prices are likely to rise also mirrors what I had been thinking. Only time will tell but I would love to say I told you so!!