Finally, the Brexit Referendum is upon us and voters are faced with arguably the most important decision in a generation – stay in the EU or leave?
The answer, at least from a property perspective is unequivocal with the majority of economists recommending that we should stay. Some are even predicting house price falls of up to 25% if we leave, combined with mortgage interest rate hikes associated with a weaker pound. Whilst many “leave” campaigners are focused on specific issues such as immigration or farming subsidies, the
wider economic situation would have a far greater impact on the property market and well beyond,
primarily based on the one thing that wobbles markets – uncertainty.
Indeed, the uncertainty surrounding the impending referendum has no doubt contributed to the 5% fall in housing transaction volumes reported in April, according to the new UK House Price Index compiled by the merged Land Registry and Office for National Statistics. The average house price also dipped by 0.4% last month – its steepest fall since November 2011. The fear of the unknown is hugely influential and people simply do not move house unless they feel secure.
This uncertainty would continue far beyond Referendum day if we were to leave the EU, with some reporting that it would take many years, if ever, for the UK to find its own feet again. The effect of leaving the EU could be disastrous, with both the Conservative and Labour party urging us to remain, along with world leaders, the City and businesses communities doing likewise.
The UK housing market fuels so much of our economy. As well as the revenues from SDLT (Stamp Duty), so many jobs and, in turn, lives are supported by a healthy property market. And not just state agents either! When people move house they spend money – on removals, carpets, insulation, furniture, kitchens, extensions, garden, decoration, etc. Not only could the price of many of these supplies rise considerably due to a weaker pound if we were to leave, but in turn, everyone employed in these sectors would potentially be affected by a housing downturn. And so would the people who manufacture the cars they in turn buy and the shoes they wear, each providing further contributions to the Treasury through income tax and VAT.
Homeowners especially benefit from a healthy housing market and, combined with the above, it should be a no-brainer that we should all VOTE TO REMAIN if we are to avoid the consequences caused by an EU exit. And, if you’re still undecided, consider what my Granny used to say: “if in doubt, don’t” (ie don’t change).
In the meantime, and whatever happens on 23rd June, please feel free to contact us for informed opinion about how the market locally is performing in the context of your own property.
Neil Newstead, FARLA MNAEA
CEO – Oakfield Estate Agents