Published: 24/05/2016The government will be holding a referendum on UK membership of the European Union on 23rd June 2016. The effect that this will have on real estate in the UK and the rest of the EU is very much conjecture. However, it is highly unlikely that the outcome of the EU referendum would cause the UK housing market to freeze as a whole. In the first quarter of 2016, any uncertainty regarding the EU referendum has been off-set by pressure from those looking to beat the stamp duty deadline in April related to the 3% stamp duty surcharge on second homes and buy to let properties. The impact is proving to be more intense in the second quarter of 2016 as we approach judgment day. Remaining in the EU will likely result in a stabilisation of the market and we will see the usual influx of wealthy international students in August/September, along with an increase in international corporate tenants. If we leave, on the other hand, we are likely to see a significant period of market destabilisation whilst new international trade agreements are negotiated, with a time frame for tying up such new agreements being up to two years. Further long-lasting uncertainty in the in the UK economy is unlikely to be offset even by the possibility that of the pound becoming weaker and London investment therefore more appealing to overseas buyers.
Regardless the outcome, once the uncertainty clears there will continue to be a market, although possibly more focused on required, as opposed to non-necessary, demand caused by such factors as divorce and the need to up- or downsize.