EU Referendum & the Housing Market
The referendum will be held on June 23 but what impact will there be on the housing market?
The only certainty if Britain were to vote to stay in the EU on June 23 is that there would be a lot less uncertainty! People who have lain awake at night spooked by worst-case scenarios in the case of Brexit would sleep easier in their beds. It would be back – more or less – to business as usual.
But the summer of 2016 is not likely to be an entirely normal one as far as the property market is concerned. Will buyers and sellers alike, have been delaying their moves until the result of the referendum is known? And what will be the impact on the market of a sudden flurry of activity post-referendum? This year could be a bit different.
According to figures from the property company Hometrack, in the 18 months leading up to the Scottish referendum in September 2014, property sales dipped by about 10 per cent.
After that, there was a six-month period of catch-up. It was the same story before and after the 2015 general election. People bided their time until they had discovered whether there would still be a Conservative government or a Labour one determined to introduce a mansion tax and other fiscal measures with implications for homeowners.
The slowdown in market activity in the run-up to the referendum is likely to see a temporary dampening down of house price inflation. But we are not expecting prices to skyrocket from the morning of June 24 in the event of an ‘in’ vote.
Certainly the experience following the Scottish referendum is an in vote would remove any immediate economic uncertainty and market activity might be expected to recover any lost ground quite rapidly
However, there is every reason to believe that the impact on the housing market would be relatively limited, whatever the outcome. That is because the mainstream housing market is primarily driven by domestic conditions – notably the imbalance between supply and demand which underpins current housing market trends.
Even in the event of Brexit, it would take so long for the UK’s future relations with the EU to be sorted out that any knock-on effects on the property market are likely to be quite limited.
Source : Onthemarket.com