The 23 June is fast approaching, and Britons will have to make up their minds whether they’d rather be part of the EU or leave it behind.
EU property laws have imposed almost no restrictions on buying and selling in the UK. In spite of this, a vote to leave the EU would still have a dramatic effect on the property market. Henry Wiltshire’s Senior Sales and Lettings Manager Nicholas Spencer looks at what the EU referendum means for London’s property market.
“As you’re probably aware, the Brexit argument is largely dominated by money; how much we have, how much it’s worth and how much we’ll lose if we leave,” says Nicholas. “If Britain remains in the EU, it is expected that the pound will increase in strength to 1.65 against the dollar. On the other hand, if Britain leaves the EU, the pound is expected to tumble to just 1.25 against the dollar. This could have major implications for overseas investors in London’s property market.
“Already, the pound has weakened against the dollar, owing to uncertainty about the pound’s future. If Britain votes to remain in the EU, the pound will strengthen and we’ll see a swift influx in overseas investment in the capital’s property market. A strong pound will enable London to retain its reputation as the international safe haven, immune to the winds of political change.
“Obviously, this is great news for foreigners wishing to buy in the UK. Given that the majority of international investment in London property is from outside the EU, leaving would make no difference while remaining would serve to attract even more European investment into the capital. It will also benefit the Government in terms of SDLT receipts.
“Remaining in the EU would be great news for domestic purchasers as well. Your home is your most valuable investment, and no one wants to risk it losing its value. Looking at the situation more broadly, the security that political stability brings will encourage inward investment. This will mean developers can build more and increase the housing stock that London so badly needs.
“The ramifications of Britain leaving the EU would be enormous. The property market certainly hopes to see the Remain campaign win on 23 June – it will encourage investment and underpin future developments for London and beyond. It should also mean more liquidity coming back the market, releasing the pent up demand caused by the uncertainty over the referendum.”
Nicholas Spencer is the Senior Sales and Lettings Manager at Henry Wiltshire’s Knightsbridge office. To talk to him about selling property or connecting with investors, give him a call on 020 3402 4758.