The day of the EU Referendum (potenial BREXIT – Britain Leaving the EU) has arrived! The state of the UK property market and general economy will depend upon whether voters decide to leave or remain in the EU.
Some feel leaving the EU would lead to a faltering economy and therefore hit prices. A hinderance to construct more homes and also allow rich overseas investors to come in and snap up property at a lower value.
The average house price in Britain is currently at £292,000, according to the latest data from the Office for National Statistics for March. Meanwhile, the average price to buy a home in London is now more than £550,000. Properties in London are now almost 60% more costly than they were prior to the 2008 financial crisis.
The Royal Institution of Chartered Surveyors has warned that Britain’s property prices are going to fall for the first time since 2012.
An EU exit would potentially cause a nervous ripple effect across the UK. Homeowners and potential buyers could choose to baton down the hatches and weather the potential uncertain economic storm, before committing to such a notable financial decision.
This consequential reduction in demand for housing will almost certainly cool the market. As a result, house prices will reduce in turn to reflect this. In an already inflated UK market this could lead to a potential loss of £11,000 to the average UK homeowner.
As mentioned earlier the impact of a Brexit on the property market would depend upon its impact on the economy generally.
The central London property market would be hit hardest, but the impact would not be confined to the capital. On the flip side if a UK suddenly freed from EU regulations attracted more inward investment, not less, the property market would benefit.
Regardless of which way the referendum goes there are those who got into property early. The average property price has increased by more than 2,000 per cent since the UK joined the EU, according to research.
What are your thoughts on the potential BREXIT?