The Directors of Premier Property Search consider the implications and uncertainties of the UK property market after announcement of the forthcoming EU vote.
We have all known that it was David Cameron’s intention and pledge to hold a vote on the issue of UK’s membership of the European Union ever since he became PM with a Conservative government majority when they were elected in May of last year.
This vote is now planned for 23rd June 2016 and the debates and arguments about how it affects the UK financially, economically and its’ future investment climate are already dominating the news.
There is already significant economic doubt and speculation about the upcoming EU vote. One political pundit said that it would take over ten years to renegotiate all of the trade deals that are currently in place should the UK vote to come out of the EU.
The uncertainty of how the Yes vote or No vote could affect the residential property market is pure speculation at this early stage. However, some say it may lead to fewer residential transactions and could even have an impact on planned housing development schemes.
Nigel Sellers of one of the country’s leading property acquisition organisations - Premier Property Search - is positive but apprehensive about the future. ‘We have experienced a recent down turn in the level of transactions resulting from the reform of SDLT rates affecting particularly the £2m+ sector and more recently the added tax on buy-to-let purchases has led to a further dip but the property market has always been resilient.
‘There is a distinct lack of supply of really good quality properties available either quietly or being actively marketed by the estate agents and this will surely continue until after the referendum.’
The Chancellor Mr Osborne, rightly claims to have invigorated and rejuvenated the property construction market since 2013; with financial incentives for first time buyers to get onto the property ladder so it will be interesting to see if this slows down in the coming months.
There is some evidence that prices in the prime central market over the winter months have softened, principally as a direct response to the reformed SDLT rates compared to other more traditional markets.
If the ‘remain’ vote were to triumph, the economic uncertainty would be removed and market activity could recover any lost ground relatively rapidly.
The vote ‘to leave’ the EU would have significant ramifications on creating a new working relationship with the EU and its members. This period of time that in all likelihood will result in even more uncertainty particularly in investment decisions for companies and individuals. However, there would be pressure to ensure trade for countries such as Ireland is maintained due to their close links to the UK and the impact it would have on their already struggling economy.
The UK housing market should be relatively static whatever the outcome as the conventional UK housing market is primarily driven by domestic dynamics. The current demand/supply disparity which is a key feature underpinning current housing market trends is unlikely to be affected by the EU referendum.
There is a high degree of optimism that the UK residential property market will not be affected by the outcome of the referendum; there are no planned elections, unemployment remains optimistically low and hopefully there are no recessions on the horizon. This is the trading norm for the foreseeable future and we are ready to help those take the next step in their housing journey.