Despite the fact that surveys and experts have confirmed little or no change in UK property markets, in light of the Brexit vote, the scare stories still circulate. We have even seen some politicians suggesting there will be a second referendum in the next two years despite the fact that the UK electorate have made their feelings very clear. As a consequence, with an information vacuum, there are rumours, counter rumours and blatant untruths circulating regarding how the UK authorities will treat those who have moved to the UK under the EU freedom of movement regulations.
Some areas of London have been highlighted as specifically at risk from residents moving back to Europe although there is still a long way to go before negotiations even start.
Concern and confusion
As we have mentioned in numerous articles of late, the truth is that nobody really knows what Brexit means for the UK and indeed for the rest of Europe. We know that the UK, as one of the biggest customers of the European single market, is more important to the European Union than the European Union is to the UK. As a consequence, there will be some haggling at the start, there will be some disagreements but they will come to an agreement which helps and suits all parties. So, what does this mean for UK property prices?
Even the quickest of glimpses at the headlines confirm that those peddling untruths and rumours are trying to force the UK electorate and politicians to perform a massive U-turn on Brexit. This is not going to happen but it is having an impact upon UK property prices in some areas.
Demand for UK property
In general demand for UK property has held fairly steady and indeed a recent survey suggested that real estate agents fully expect demand to improve. However, this may not help some areas around the UK which have attracted more than their fair share of EU workers. If you were a buy to let investor and it looked as though employment opportunities in the region would fall this would potentially have a significant impact upon demand for rented properties. So, in these particular areas it would be no surprise to see a short to medium term softening of the market – which could actually turn into a buying opportunity for those with a long term investment horizon.
The real situation
If you take a step back and look at the situation from a distance, employment opportunities will still be available in these areas whether EU workers return to their former homelands, and UK workers take their place, or EU workers remain. So, the idea that the market for rented accommodation will soften seems to be based upon very weak foundations?
Let’s not forget that the UK government is essentially playing a game of poker because there are a significant number of UK expats living in Europe who, on the basis of these rumours and untruths, could also be forced to return to their former homeland. So, while the headlines may make for interesting reading the fact remains that the underlying employment markets will remain, demand for property may soften in the short term but is there really any change to the long-term outlook?