A group of the main house builders in the country have argued that a vote to leave would result in it being harder to build houses in the country due to uncertainty in the economy stifling investment and knock on effects. The Treasury has said they believe coming out of the EU would result in a 17% decrease in house prices.
The recent Stamp Duty changes have resulted in many people being caught by an extra 3% Duty over and above buy to let investors who were the ones it was believed were the real target. Income tax changes, due to come into force in 2017, will have a significant impact on buy to let Landlords with 90% or so being worse off and some then operating at a loss.
Logically the above would mean a number of buy to let Landlords deciding to sell up and an influx of properties coming onto the market, many at the lower end of the market. This could mean far greater choice of properties for first time buyers and a cooling down in the market, potentially making properties more affordable. So far so good but those Landlords who stay in the market will likely increase rents making it more difficult for some first time buyers to save up for a deposit.
If house builders build less properties government housing targets will fall short and less houses means less choice and new builds account for a high percentage of properties being made available for schemes such as shared ownership. These can give people their chance to get a rung on the housing ladder with some schemes targeting key workers such as NHS and police employees.
If the market were to crash this would mean the economy was in an uncertain state which would then impact on lending, job security and the ability of people to obtain mortgages. Lenders would become nervous so would it really help first time buyers?
Of course we have had scaremongering before and bricks and mortar will always be popular so I suspect property will remain a feature for people investing in the long term so many investors will stick with it. Unlike our European counterparts, Home ownership is almost an expectation in modern Britain so high numbers will aspire to it. We don’t really know what impact leaving the EU would have, perhaps not much long term. And we shouldn’t forget we are fortunate to live in a beautiful part of the country where housing is always popular. Who wouldn’t want to live here regardless of anything else going on?
Warren Robertson is head of Conveyancing and Partner here at Howlett Clarke.