‘Hard Brexit’ blamed for rising prices and stagnant market
With a ‘hard Brexit’ on the cards, the construction industry is facing a shortage of workers, pushing up house prices and making them unaffordable for potential buyers – according to a new study.
As Theresa May begins to negotiate the UK’s exit from the European Union, fears are growing regarding the effect of a ‘hard Brexit’ on an already unstable housing market. With both premium and low-income housing construction already at a record low, a harder stance on immigration could starve the industry of a large percentage of its workforce.
Almost one in ten construction workers in the UK today are from the EU, rising to one in three in the capital – and with a sector so reliant on immigrant skilled workers, the future is beginning to look worrying according to property selling experts.
In 2015, only 142,390 homes were completed across the country, far short of the 250,000 needed per year to cover the rising population. This lack of available housing is pushing up the value of existing homes, to the point where potential buyers are unable to afford them.
New research from The Centre for Economics and Business Research claims that house prices will continue to increase, albeit at a slower rate in 2017 than 2016 with the average house reaching £254,000 by 2021 – a £44,000 increase in just five years.
London and nearby boroughs in the South East on the other hand are set to see values reduce by 5.6% next year thanks to the effects of the referendum, with greater reductions to be seen if more immigrants are forced to leave the country once Article 50 is triggered.
“After the Tory party conference in Birmingham, a so-called ‘hard Brexit’ scenario in which the UK loses access to the single market due to the introduction of immigration restrictions has become more probable,” said Kay Daniel Neufeld of the CEBR.
“The consequences of this are ambiguous: if immigration is reduced drastically, pressures on house prices could ease in certain areas. However, as the construction sector relies on immigrant labour skills, the UK might find it difficult to build the required number of houses to address the shortage we currently see in the market.”
Those looking to sell their homes fast in the short-term may be facing the prospect of dropping their asking prices in order to find a buyer with the necessary funds to purchase, or face a lengthy period on the market. Alternatively, they can use house buying companies who will buy any home for cash at competitive prices, without having to wait for market conditions to stabilise.
Worried about having to reduce your asking price? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.