House-building projects at risk due to new immigration policies
As the Brexit deadline looms, the UK housebuilding industry is facing an uphill battle as a result of proposals for new policies that could limit the influx of low-skilled EU workers.
For those who work within the construction industry, it is common knowledge that the workforce is made up from workers originating from a number of different EU states. In London alone, almost a third of the construction workers are from the EU, but new proposals by the government regarding immigration in a post-Brexit UK may bring the industry itself to a stand-still as sold house prices continue to rise.
The proposals, put forward in December, aim to curb the influx of low-skilled workers into the country by allowing only those earning more than £30,000 a year to gain citizenship.
While the government has offered to introduce a 12-month visa to aid those industries where available workers are in short supply, many within the construction industry believe that this is not enough to prevent a massive slowdown in UK housebuilding.
There has, already, been a huge fall in the number of EU migrants coming to the UK since the Brexit referendum in 2016, and accreditation bodies such as the Royal Institution of Chartered Surveyors are acknowledging that this has led to major labour shortages that had hampered market growth immensely over the last eight quarters.
“What’s particularly worrying is the government’s obsession with salary thresholds for migrant workers entering the UK. The figure of £30,000 was floated in the Migration Advisory Committee report and was met by fierce opposition from almost all sectors,” said Brian Berry, chief executive of the Federation of Master Builders.
“It makes no sense to draw meaningless lines in the sand when we should base our immigration policy on what will make our economy strong and productive.”
The UK is already behind schedule in regard to the Tory government’s pledge to build 300,000 new homes every year as the population continues to grow, and this latest shift in policy could be the straw that breaks the camel’s back.
A lack of new housing means increased competition between prospective tenants and buyers for residence in those homes that are already built – increasing their value. And while this may seem like great news for those who own already, it can be a huge handicap if they suddenly find themselves needing to sell their house fast for work or because of illness, as fewer prospective buyers will be able to afford them.
The knock-on effects could easily bring the industry to its knees, according to analysts, and with the Brexit deadline less than eight weeks away, fears are beginning to mount.
“Construction businesses need stability and, with 100 days from Brexit, the government seems to be working toward providing the exact opposite.” said Richard Beresford, chief executive of the NFB.
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What does the EU vote mean for the property market?
Misquoted facts and propaganda have been a problem on both sides of the Brexit argument – but for those who own a home or are hoping to buy, which is the best choice?
Today (Thursday 23 June), millions of Brits go to the polls to vote on the issue of remaining in the EU. With both the ‘Remain’ and ‘Leave’ campaigns consistently accused of unsubstantiated claims, it’s often hard to know exactly what the effect an exit would be on UK homeowners and potential buyers.
The ‘Leave’ campaign states that freedom from Brussels will position the UK as a financial powerhouse with a high standard of living and a level of prosperity not seen since the days of the empire. And of course, these claims are rubbished by the ‘Remain’ campaign, with many believing that it will trigger a nationwide recession, dwarfing the economic downfall we suffered almost a decade ago. So who’s right and who’s wrong?
The biggest issue of Brexit is the lack of empirically valid unbiased data. Many Brits believe that the UK is the most important EU state, a statistic that is sadly far off base. In terms of contributions to the EU, we lie in fourth position behind France, Germany and Italy and as a result, the EU is far less dependent on us than we think. And whilst we do contribute heavily each year financially, the savings we would make by leaving are far too small to really aid the country when compared to our annual GDP. Those who wish to leave the EU, however, believe that the amount of money we would gain through long-term trade deals would help the UK increase funding for the NHS, property development and education.
The problem is that on both sides of the argument, many are voting on issues of contention such as immigration and the dream of being independent, while ignoring the more subtle issues that would impact UK property owners and investors long-term.
It is also important to take note of events outside of the capital, as much of the regeneration in the north of England stems from EU legislation and funding that has allowed for greater investment in more areas of the UK. So many ‘Remain’ campaigners believe that voting to leave the EU will simply lead to a reduction in funding for towns and cities outside of the south east.
‘Leave’ campaigners, on the other hand, take the view that thanks to the funding, these cities are prospering successfully already and will continue to do so, using events such as the BBC’s move to Manchester as proof.
For those in the property market, experts believe a vote for ‘Leave’ will lead to one of two scenarios. The first is that overseas buyers will fail to see the attraction of the purchasing in London thanks to recent changes in tax and will instead invest in other European cities, leaving the capital as a property ‘ghost town’ with prices nobody domestically can afford.
The other scenario is that the value of the pound sterling will fall so dramatically that interest rates will rise to a point that is untenable for most looking to buy a home, further dampening the market. Many UK property experts believe that prices could fall as far as 30% if the Brexit occurs, leaving vendors looking for a fast house sale in a precarious position.
Those who wish to leave, however, see the situation differently. Even with talks of a possible exit, house prices have continued to rise – so why would they not continue to do so, considering the property market is largely driven by consumer confidence? Moreover, since we entered the European Economic Community, the number of new homes being built has continued to fall, and with the new found wealth and improved economy we would enjoy, more houses would be developed and those looking to get on the property ladder would most definitely find it easier.
Unfortunately, the only way to find out whether the UK would benefit from its independence is by taking the plunge and voting ‘Leave’ – but if the negative forecasts regarding our financial security are correct, the decision will have already been made and there would be no going back – and therein lies the problem.
Remaining in the EU means we have a good idea of what the future holds, whereas leaving the EU is a gamble – and for those who have much to lose, such as homeowners, the risk may not be worth taking.
Hoping to sell your home quickly? 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.
Brexit: A look at the impact on property prices
With an upcoming referendum deciding whether Britain will stay in the European Union or not, many sellers are looking for fast home sales to avoid the possibility of losing money.
The ongoing discontent felt around the country by those who feel that Brussels has too much control over how Britain operates has become a hot topic for the government, especially in recent weeks – and the furore is only set to continue as the deadline looms (23 June).
While many believe that the current drive to leave the Eurozone is an objective of the vocal minority alone, it has nonetheless sent alarm bells ringing through a variety of institutions and industries around the country. With foreign investment slowing since Brexit first hit the headlines – and the pound hitting a seven-year low against the dollar – it is somewhat understandable that those within the property market are beginning to wonder exactly how leaving the EU could affect the sale and purchase of domestic housing.
Many property experts are attempting to calm the masses, believing that any break from the European Union would have little influence on prices.
“Property shortages will continue to be a structural factor in the market,” said Phil Shaw, chief economist at Investec. “In terms of regulation, mortgage lending and prudential lending limits won’t necessarily change as a result of Brexit, and they are all arguably more important determining factors in house prices than the EU vote.”
There are, however, a growing number of voices postulating a fall in value for domestic properties, as high as 5% in certain areas. This is not directly linked to Brexit itself, but rather a result of the uncertainty felt by buyers and sellers across the country which could ultimately lead to a stagnation of the market.
In a recent survey by online estate agent eMoov, 15% of the 1,000 homeowners questioned were worried that they could lose money as a result of Britain leaving the Eurozone. This doubt is causing many sellers to look for a fast house sale in order to avoid any possible negative consequences, while others still are retreating from the market completely in order to weather the storm. Those sitting tight are hoping that the vocal minority are quelled in the upcoming referendum by those who are already happy with our position within the continent.
If you’re looking to sell your house quickly due to concern that the upcoming Brexit referendum could affect your home’s value, why not avoid the stress and get a quick sale for cash? National Homebuyers – we buy any house – so call 08000 443 911 or request a call back to find out how much you could get for your property.
UK exit from the EU could result in house prices dropping by 5%
Prime Minister David Cameron announced over the weekend that there will be a referendum in the UK to stay or leave the EU on 23 June 2016. Online estate agent eMoov has predicted that if the UK votes to leave the EU than house prices could potentially drop by 5% or more. They believe that it won’t necessarily be leaving the EU itself that could see house prices drop, but the air of uncertainty that will have a detrimental impact on the market.
Since the UK joined the EU in 1973, the average house price has increased by over 2,000%. However this new report by eMoov suggests that a “Brexit” (the term used to described the British exit from the EU) could mean that the average UK homeowner could see their property fall in value by more than £11,000.
In this survey eMoov polled over 1,000 UK homeowners and found 55% of those asked, believed leaving the EU would affect the value of their property. Just over a third (34%) think they could increase; while 21% think they could decrease.
Russell Quirk, Founder and CEO of eMoov.co.uk stated that
“An EU exit would cause a nervous ripple effect across the UK, with homeowners and potential buyers choosing to baton down the hatches and weather the potential uncertain economic storm, before committing to such a notable financial decision.”
He went on to say:
“Should the UK public vote to leave the EU, we believe it could have a detrimental knock on effect to the UK property market. We’ve been part of the EU for over 40 years now, so it’s understandable that such a momentous change will lead to uncertainty amongst the UK public, as to the resulting implications an exit will have on them. This air of uncertainty will lead to inaction amongst those looking to buy and sell and the resulting dwindle in demand, will always lead to a reduction in house prices.”
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