Brexit and the local property market

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11 Apr 2016

What impact will Brexit have on the local property market?

Author: Antony Gibson

Comparable to the lead up to the General Election last year and the Scottish Referendum in 2014, the uncertainty surrounding the in-out EU referendum vote will probably be what causes the most impact on the property market, rather than the results themselves.

Should we remain in the European Union?The results are unpredictable with many polls indicating a fairly even split, including Romans’ latest poll which revealed that 45% say we should stay in the European Union, 44% say we should leave, and 11% are unsure.

“This uncertainty could cause people to delay their next move or investment purchase as they wait to see what the outcome will be” comments Antony Gibson, Residential Sales Director at Romans. “This would slow the market down and result in a continued supply and demand imbalance.

“The truth is nobody knows what will change if we did leave the EU, so it is near impossible to predict what will happen to the local property market, if anything at all.

“I believe that in the long run the residential housing sector will experience little change, with the main reasons for moving outweighing any economic uncertainty, such as downsizing, upsizing, moving to be close to good schools or your new job” adds Antony.

Will Brexit affect property investment?

A survey by accountants KPMG found that 66% of real estate experts believed that ‘Britain leaving the EU would have a negative impact on inbound cross-border investment.’

A degree of uncertainty There is also evidence that developers have paused plans, especially in the capital, as they are concerned foreign investors might avoid the UK property market, depending on the results. Although interestingly, if Britain left the EU and the UK exchange rate weakened this could result in an uplift of international property investors as they can buy British property cheaper. Experts also suggest that if the exchange rate weakened there would be less of a pull for overseas workers to stay in, or move to the UK, so there could potentially be less demand for property.

“A lot of the predictions are focused on the London property market, which relies heavily on international property investment” says Michael Cook, Lettings Managing Director at Romans, “I personally don’t believe the results of the Brexit vote will have a large impact on property investment in the local area, other than the uncertainty leading up to the results.

“If we do leave the EU following the referendum and the rules and regulations surrounding property investment change, assuming the post-Brexit government decides to exercise its freedom from EU rules on property ownership, we may see some fluctuations in the local area, however this could take months, if not years, to implement.

“Plus, the UK will always attract foreign investment from Europe and beyond, with many people moving here due to the schools and the lifestyle, which won’t change whether we stay in the EU or not.”

Ultimately, the local residential property market is unlikely to be dramatically affected by the Brexit results, other than a potential slowdown due to the uncertainty leading up the results. 

To learn more about the local property market visit the team at your nearest Romans' branch or call 01344 985 666 to be transferred.

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