Members of the property industry join the rest of the country in going to the polls today to decide whether the UK should remain in, or leave, the European Union.
For many months different parts of the industry have been canvassing views and giving their own opinions on membership; there has been general consensus that the long formal campaign period has triggered economic uncertainty that has led to a reduction in demand and possibly in house prices, especially in London.
“Elections inevitably bring with them periods of uncertainty in the market and our figures would suggest that May’s devolved elections are no exception. Likewise, the EU referendum is likely to be an influence in terms of the damper outlook for London in particular” said Simon Rubinsohn, chief economist at RICS, back in April.
In May the National Association of Estate Agents and Association of Residential Letting Agents produced a report, compiled with the Centre for Economic and Business Research, saying that although there were no conclusive ‘Leave’ or ‘Remain’ arguments for the industry, a Brexit “could have long-lasting and damaging consequences.”
The report said a British withdrawal from the EU “risks drastically reducing the construction workforce, compromising current plans to build hundreds of thousands of new homes needed to ease the shortage in supply.”
CEBR said that in 2014, 19 per cent (£5.3 billion) of total Foreign Direct Investment inflow into the UK came from EU sources; in 2013, 17 per cent of sales in London’s prime property market made to non-UK recipients were to European nationals. The report therefore claimed that in the event of Brexit, a portion of FDI would be re-directed to EU countries, ‘freeing up’ housing units - particularly in London - for British buyers.
ARLA says a likely post-Brexit reduction in inward migration could reduce rents, because of reduced demand, but that this was both a blessing and a curse for different sectors.
Several volume and London-centric house-builders have warned of reduced investment in Britain and possible skills shortages if there was a Brexit, while concern over whether London could retain its ‘world city safe haven’ status has been aired by many pro-Remain property industry groups.
Many industry players reporting to the City - notably London agency Marsh & Parsons, Countrywide and Foxtons - have aired concern about transactions volumes being affected by pre-polling uncertainty.
The result of the referendum is likely to be known by 6am tomorrow, and Estate Agent Today and Letting Agent Today will be carrying reaction from the industry as the result becomes clear.
In the meantime, Marc Da Silva has written an Industry Views piece on what the referendum means for our industry here.