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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