Could an exit from the EU affect house prices?

Could an exit from the EU affect house prices?

With an EU referendum set for 23rd of June, online estate agent eMoov.co.uk, has predicted an EU exit could see UK house prices drop by 5%.

The wealth of financial and economic implications of an EU exit stretch far beyond the UK property market, however, for many UK residents the impact to property prices will be their primary concern as their home is the most expensive asset they are likely to ever own.

eMoov recently surveyed over 1,000 UK homeowners and found 55% of those asked, believed leaving the EU would impact the value of their property (34% think they could increase, 21% think they could decrease).

Since Great Britain joined the EU in 1973, the average house price has increased by over 2,000%. However eMoov believe that it won’t necessarily be leaving the EU itself that could see house prices drop, but the uncertainty amongst homeowners and buyers as to what will happen next.

eMoov believe that an EU exit would cause a nervous ripple effect across the UK, with homeowners and potential buyers choosing to baton down the hatches and weather the potential uncertain economic storm, before committing to such a notable financial decision. Will unemployment rise? GDP fall? Could exports fall, causing businesses to fail?


The resulting potential reduction in demand for housing will almost certainly cool the market and, as a result, house prices will reduce in turn to reflect this. In an already inflated UK market this could lead to a potential loss of £11,000 to the average UK homeowner.

Will an exit from the EU affect UK house prices?

Russell Quirk, founder and CEO of eMoov.co.uk, commented: “Should the UK public vote to leave the EU, we believe it could have a detrimental knock on effect to the UK property market. We’ve been part of the EU for over 40 years now, so it’s understandable that such a momentous change will lead to uncertainty amongst the UK public, as to the resulting implications an exit will have on them.

This air of uncertainty will lead to inaction amongst those looking to buy and sell and the resulting dwindle in demand, will always lead to a reduction in house prices. We believe it could easily drop by 5% maybe more, so the average UK homeowner could see their property reduce by £11,000 in value.

Since we joined the EU the average UK house price has increased by more than 2,000%, but even just the potential of an EU exit could start to slow the market. So the results of a yes vote on the main stage of the EU could have a much larger impact on the UK as a whole.”

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Comments

  1. cornishalancornishalan22 February 2016 10:41:34

    For all those trying to get onto the property ladder this could only be a good thing. With house prices rising faster than wage increases, many potential buyers are desperately awaiting a drop in house prices. Could this news sway some potential buyers into voting "out"?

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Latest Comments

AbbieP.
AbbieP. 22 Jul 2016

"While house prices in the most expensive eleven boroughs have declined values in the cheapest eleven boroughs continue to rise" - not a nice way to even out the price range. London is overrated as it

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AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

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CommercialTrust
CommercialTrust 19 Jul 2016

Retirement investment has always been one of the biggest draws of buy to let. And the buy-to-let demographic is, on balance, older. (Over a third of our applicants are over 50 at the time of application.) It...

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Forrest Wheatey
Forrest Wheatey 11 Jul 2016

I find the time perfect for ever home-owner wannabe. Prices should slowly, but steadily drop, at least for the inner buyer. Making it harder for outsiders to buy properties (the whole Brexit thing means...

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property guru
property guru 11 Jul 2016

Why should Ajay even have to be looking for it. It should be public knowledge. Why is not just publish each years and to were it is and be AUDITED. Accountability.

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property guru
property guru 11 Jul 2016

Surprise suprise

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CommercialTrust
CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee
Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara
DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara
DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara
DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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