EU exit could wipe thousands off house values

Estate agents claim that exit from EU could wipe thousands of pounds off house values over next three years.

According to the National Association of Estate Agents, homeowners in London could lose as much as £7,500, while homes elsewhere could lose £2,300.

The report, jointly commissioned by the Association of Residential Letting Agents, said rents could also fall. The report also claims that a vote to leave could result in fewer homes being built, because of a shortage of construction workers.

According to the 2011 census, about 5% of construction workers in England and Wales were born in other EU countries and so prevention of them travelling freely in the UK could lead to a more severe skills shortage, says estate agents.

Mark Hayward, Managing Direction of the National Association of Estate Agents (NAEA) said: “We simply wouldn’t have the resource to put the bricks and mortar together.

“It has the potential to have a very damaging effect on the future housing market.”

The study suggests that prices in London would be hit by a fall in demand from foreign buyers, particularly those from EU countries. Statistics from 2013, show that 17% of homes sold in the middle of the capital went to EU nationals.

If the UK exit the EU, free movement of labour would not be maintained. The research claims that as a result of this, the population of the UK could fall by more than a million people.

A separate research note from the ratings agency Moody’s, said a leave vote could be good news for first-time buyers.

Gaby Trinkaus, a Vice President and senior analyst at Moody’s said: “First-time buyers would benefit from lower competition for housing, as house price and rental inflation would slow down if immigration is curbed.”

The Centre for Economics and Business Research (CEBR), carried out the research which suggests that by 2018, a British exit could reduce the total value of UK housing by as much as £26.5Bn.

It says the impact that an exit would have on rent would be minimal in the first two or three years, however EU nationals living in the UK are more likely to be renters than homeowners.

David Cox, Managing Director of the Association of Residential Letting Agents (ARLA) said: “If demand eases to such an extent that landlords cannot recuperate costs, we’ll likely see a mass exit from the market, which would then just have the opposite effect on demand as supply falls – and we’d be back to square one.”

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