Brexit: Demand for housing will keep the market buoyant

The UK real estate market will remain strong in the wake of an ‘out’ vote in the EU referendum because of the high demand for housing, Bridging & Commercial has been told.

Recent reports suggest that leaving the EU could result in a dip in house prices, but Bob Sturges, Head of PR & Communications at the newly-rebranded Fortwell Capital, believes that demand for housing will remain strong – guaranteeing that the market continues to thrive.

Bob said: "Supply and demand is the key driver - so long as there are more people requiring housing than homes to accommodate them, prices will remain buoyant.

“Britain will continue to attract overseas arrivals seeking work or a safe haven for their capital. And it is laughable to think that a post-Brexit government would peremptorily cleanse the UK of the hundreds of thousands of EU citizens already living here.”

Concerns have also been raised about investment in UK property from overseas, but Bob dismisses this as well – provided that the government doesn’t add any restrictions.

Bob added: “Wealthy overseas investors from outside the EU - from Russia, the Middle and Far East - would not be affected at all.

“They will continue to flock to London and other attractive towns and cities for the myriad positive reasons I need not recount here.

“It's interesting to consider that, once free of Brussels' dead hand, a liberated Chancellor of the Exchequer could introduce rules to restrict how much UK property is allowed to be bought by non-doms and their like. That might please the 'down-with-rich' brigade.”

Based on the run-up to Scottish referendum, Hometrack, the residential property market analyst is forecasting a slowdown in transactions and prices.

Richard Donnell, Insight Director at Hometrack, said: "Our analysis shows that the Scottish referendum, and the 18-month campaign that preceded it, resulted in 10% fewer transactions and slower house price growth over the period relative to England.

“The shorter run-up to the EU vote will help, but the true impact will depend on how quickly the campaigning focuses on the economic ramifications for UK households and the knock-on effect for housing-related decisions, as Scotland proved.

“A vote to remain in the EU should see a return to business as usual whereas a vote to leave will create additional uncertainty."

From a business lending point of view, an ‘out’ vote could have a significant impact on SMEs.

Small businesses in the UK have benefited from schemes such as the European Investment Fund (EIF), which does not lend money to SMEs directly, but provides finance through private banks and funds.

Tomer Guriel, CEO and Co-Founder of business e-lender, Everline said: “From a lender perspective, if the UK stayed in the EU, we - and the small businesses we support - would continue to benefit from some fantastic initiatives such as the European Investment Fund (EIF).

“In 2013, we signed the first agreement with the European Investment Bank’s EIF under the European Progress Microfinance Facility (EPMF) for an £8m guarantee program, and in 2015, we signed the second guarantee agreement with the EIF for £40m under the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) program.

“Support like this is crucial to ensuring lenders like us are able to open up a new portfolio of loans to the currently underserved small businesses which account for 99.3% of all private sector business in the UK.”