Leaving the EU would challenge the UK property market, according to research by Carter Jonas
PUBLISHED: 16:48 16 February 2016 | UPDATED: 16:48 16 February 2016
As the Prime Minister embarks on a renegotiation of EU membership terms, findings from a poll of leading property experts show that nearly two thirds, 65%, believe that a Brexit would have a negative impact on investment in UK property.
Darren Yates, Head of Research, Carter Jonas, said: “Whilst the EU referendum campaign is still in its early stages, the majority of the property industry are concerned that a Brexit would make the UK less attractive for investment. There is a distinct uneasiness about leaving the European Union. Only around a fifth of those polled - 22% - believe that a Brexit would have no effect on investment, while just 13% think that it would have a positive impact.”
However, the poll also suggests that a potential Brexit is only one of the major challenges facing UK property over the next two years. Respondents also highlighted concerns about the housing shortage, rising construction costs and the prospect of higher interest rates, in addition to the property industry skills shortage and planning reforms.
Mark Charter, head of Carter Jonas’ Oxford office said, “Regardless of the ‘in or out’ debate, people in the property industry want certainty. As we saw before the referendum on Scottish independence, many occupiers and investors delayed their decision-making. We expect a similar ‘wait-and-see’ approach as the EU referendum draws near, which could impact on sentiment and activity. While UK plc will survive whatever the outcome, a Brexit would lead to more uncertainty while the new arrangements were negotiated.”
Darren Yates continued: “If there is a vote to stay in, we would expect a swift return to ‘business as usual’. However, should we vote to leave the EU, the potential impact is likely to vary across different parts of the market. Ultimately, it will depend on the nature of the new UK-EU relationship but, for example, there would initially be questions around the degree of market access to the EU for UK manufacturers and financial services firms. There would also need to be clarity around future support for the UK farming industry.”
In the longer term, in or out of the EU, “fundamentals” will continue to drive the UK property market. Moreover, as an open, large and growing market of over 60 million people, the UK would remain a very attractive place to do business. While there are some serious home grown challenges such as the housing shortage which need to be addressed urgently, the UK still offers one of the most transparent and sophisticated property markets in the world.