Uncertainty in the property market could “linger” if Britain decides to leave the European Union following the referendum on 23 June, according to a new report by the Royal Institute of Chartered Surveyors.
Analysts have warned of a slowdown in the housing market in the run-up to the EU referendum due to uncertainty over a possible Brexit.
Before any national poll there is usually a fall in the number of residential transactions as investors delay their decision to purchase a home.
The RICS EU Referendum Paper said: “Should the UK opt for a Brexit, we could assume that uncertainty could linger whilst the UK government negotiates new trade deals and relationships with the EU and third countries.”
RICS said that as the low-to-middle priced property market is directed by domestic participants, uncertainty has had less impact on demand and house prices at this end of the market when compared to the higher end.
“A significant number of higher end properties – particularly those in London and the South East – are purchased by EU and non-EU individuals. Brexit could see less demand for higher end properties as highly paid executives could follow their headquarters to mainland Europe; relieving pressure in demand for higher-end residential areas. We can, therefore, suggest house prices could decrease in the immediate to short term,” the report said.
The report revealed that short-term uncertainty is also contributing to falling international investment in Britain.
Data in the paper showed that there has been a steady easing in international demand for UK office, industrial and retail property since the EU referendum was announced last year.
Demand among international investors for UK commercial property is now at its lowest level since RICS records began in 2014 with just 5% of members reporting increased interest from overseas companies over the last three months.
RICS chief economist Simon Rubinsohn said: “There is no doubt that since the EU referendum became a certainty following the general election last May, we have seen a decline in interest from overseas investors in UK commercial property. At least in the short term, we know that international retailers and service providers are finding the UK market less attractive.”
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