brexit redstones image

How will the Brexit affect property prices?

It’s a question that many buyers and sellers are asking us right now – how will the Brexit affect property prices? Redstones have been following the latest developments carefully.

Expert views are all mixed. George Osborne has made public comments about mortgage rates rising and house prices plummeting post-Brexit by an estimated 18%, causing concern for some who may be downsizing but perhaps not for first-time buyers. The ratings agency Moody’s has stated that first-time buyers would benefit from a vote to leave the EU, as a decrease in house prices would make it more affordable for people trying to get onto the property ladder.

The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA) have stated that Brexit would depress future price rises, leaving the average UK house worth £2,300 less in 2018. These leading industry bodies also state that rental amounts may fall if Britain exits the EU.

Interestingly, a KPMG poll of 25 global real estate investors has revealed that two thirds believe a Brexit would result in less investment into property in Britain. This is because, in times of uncertainty, investors feel more comfortable to sit tight.

A lack of investment could affect the rate at which house building occurs, which will only make the current housing shortage worse. Furthermore, a shortage of workers from abroad to work on house building projects could also occur. However, some believe that uncertainty for investors and developers may prop up property prices, which have already jumped nearly 10% in the UK in 2015.

Although nobody quite knows the outcome of the referendum vote yet and the resulting impact on the property market, the potential impact is yet another consideration for the public to take into account.