EU Referendum – should we stay or should we go?

The referendum on whether the UK remains in the European Union will take place on 23 June this year.

Historically, Ipsos MORI polls show that in the 1970s and 1980s there was significant desire from the British public to leave the EU, but more recently polls have suggested a fairly even split between those ‘for’ and ‘against.’

At its recent Prospects for Property 2016 conference, Strutt & Parker clients were asked whether they thought the UK would leave the EU, and an overwhelming 86% responded with a ‘No’.

Stephanie McMahon, Head of Research at Strutt & Parker has investigated what the possible impact on the property market could be if the UK votes to leave the EU. She said: “The only thing we can be sure of at the present time is that no one genuinely knows what the impact of an EU exit would be, and we have to be careful not to make this a binary event – should we exit the negotiations around trade and movement of people will be extensive and ongoing. That said, in the short term it is anticipated that a period of uncertainty will persist in the run up to 23 June as the world awaits the outcome of the vote.

“Residential markets are highly influenced by uncertainty and London in particular would feel the effect of nervous buyers, the consequence of which is likely to be a drop in trading, particularly foreign investment. However, further across the UK, the impact is likely to be less, apart from in areas where high numbers of workers are employed in international businesses.”

In the longer term over the five years post-Brexit, domestic household wealth and confidence may be impacted, influencing housing decisions. If exit results in less immigration into the UK, some pressure may be taken off the demand side of the housing market, reducing inflation. For London, sterling devaluations could be positive as property becomes cheaper for foreign buyers.

George Burnand of Strutt & Parker’s Winchester office, said: “Brexit is an ever-evolving subject and the full impact on the property market from the vote is impossible to predict. We would advise those who are keen to move home over the next year to hold their nerve and continue with their plans; certainly the evidence from the first few weeks of campaigning is that buyers are still buying and we have seen an increase in new registrations.

“The Winchester houses we have launched over the last few weeks have received a huge amount of interest with guide price offers being made.”

George concludes: “Good local school catchments and how far from the station are still what people want to talk about long before whether we should be in or out!”