Bremain or Brexit: That is the question?
Apologies for yet another abuse of this well-known Shakespearian quote but in this case it appears appropriate due to the existential angst that the referendum debate is giving rise to in both the Bremain and Brexit camps.
In terms of its current impact on the property market the referendum debate appears to have slowed the market down as Royal Institute of Charter Surveyors (RCIS) has reported that the number of houses for sale has declined more widely than at any time since RICS started collecting this data in April 1999. The uncertainty brought about by the debate has no doubt contributed to the decline. However, it needs to be borne in mind that in addition to the referendum debate there was also a significant change in stamp duty and land tax for second home owners in April of this year and this change is also likely to have had a significant impact on the property market.
In terms of looking forward to after the referendum has taken place, the outcome is essentially unknowable – whilst a Brexit may result in some investors deciding not to invest in property in the UK, it may equally cause other investors to view the UK property market more favourably as a base of operations free of EU regulations. That said a Brexit is more likely than not going to cause a drop in the property market simply because the terms of a Brexit are unknown and will be subject to negotiations with third parties.
What is clear, however, is that due to the stage of the economic cycle we are currently at, there is likely to be downturn in the property market in the next couple of years whether or not the referendum results in a vote for Bremain or Brexit. The severity of the downturn as ever will be governed by the policy responses to such a downturn and how widespread the downturn is globally.
Looking further ahead the property market in the UK is likely to remain on an upward trend based on the laws of supply and demand as fundamentally there is too little housing and too much demand for housing in the UK and bar a catastrophic event leading to a significant population decrease in the UK this is likely to remain the case for the foreseeable future.”
Jonathan Webb – Head of Commercial Property, Cook & Co Solicitors