Britain’s property market will be turned upside down if voters opt to leave the European Union on June 23, say two prominent housing experts.
Basically, it will lead to a faltering economy and therefore hit prices, hinder ability to construct more homes and also allow rich overseas investors to come in and snap up property at a lower value.
Galliard Homes, London’s largest private house builder, sent Business Insider a statement this morning saying that if a Brexit — Britain leaving the EU — happens “the London economy will falter” and “the uncertainty it would cause will generate a value drop in the property market in a very short time.”
It added that if Britain leaves the EU then construction costs “will rise by up to 15%” and that its 7,500 planned constructions in the capital could be in jeopardy as “many site/construction staff working in London are people who originate from countries across the EU.”
“Currently some 39% of London’s population of 8.66 million people were not born in the UK,” according to Galliard, suggesting the EU plays a huge part in the city’s property market, and a sudden downturn in movement would cause a crash — a shockwave which could impact the whole of the UK.
Meanwhile Peter Wetherell, a London estate agent specialising in luxury homes, said in a separate statement sent to BI that a Leave vote would “generate shock and turmoil” in London and result in a Brexit bubble as rich overseas buyers would take advantage of the plummeting Pound by making short-term, high-end investments.
A Brexit would also create a “two-speed” marketplace, it said, and property areas more reliant on EU buyers would go into stagnation while places like West London would continue to flourish thanks to rich non-EU buyers. But a vote to Remain, it added, would see the market get over the referendum uncertainty by the last quarter of 2016.
Galliard Homes Managing Director Don O Sullivan said voters had to think carefully:
“This is clearly a big decision for all, with many competing factors and issues but we at Galliard Homes strongly believe that it is better for the short and long term growth of the London economy and the wider UK for the country to remain within the EU.”
A number of analysts have already made grave predictions on the effect a Brexit would have on the UK property market. Research house Bernstein said leaving the EU would kill Britain’s property prices and drag the banking sector down with it.
The average house price in Britain is currently at £292,000 ($422,099), according to the latest data from the Office for National Statistics for March. Meanwhile, the average price to buy a home in London is now more than £550,000. Properties in London are now almost 60% more costly than they were prior to the 2008 financial crisis.
The EU referendum is currently too close to call. A recent Survation poll showed the Remain and Leave sides virtually neck and neck with just two days to go until the vote.