It may be just under four months away still, but the debate over the referendum to leave the European Union (often shortened to Brexit) is already in full swing!
If you’re already sick to death of hearing the claims Britain would be better off staying in the EU or leaving it, the BBC have put together a fairly straightforward guide explaining the advantages and disadvantages of Brexit.
We won’t truly know what effect an exit would have until it actually happens, but there is the potential that it could have an impact on property prices.
While all of the press coverage is making the vote seem like a very big deal, it’s worth bearing in mind that the property market is hardly going to collapse either way.
After all, there were also worries about what would happen to house prices following the Scottish independence referendum, although that now seems like a long time ago!
The worry is that if we do leave the EU then the lack of incoming capital will lead to a sharp drop in the value of the pound, which will have a knock on effect to the housing market.
Analysts are predicting that central London, where foreign investors are the most active, will be the hardest hit area, although the drop in prices will extend across the whole UK.
However, there is also an argument that the drop in the value of the pound could have a positive impact, as overseas buyers take advantage of the short term instability and low prices.
It’s also worth noting that Brexit would likely have a big impact on migration as the government is given more control over immigration.
While many might see this as a positive, it will be a real hit to the construction industry which is still struggling after the recession and relying on workers from across Europe.
Tighter immigration controls would further limit the construction industry, and again, this would have a negative impact upon housing prices.
Ultimately a vote to stay in the EU would remove any uncertainty surrounding the housing market, while a vote to leave will result in a period of negotiation which will inevitably lead to some short term instability.
As we’ve said though, it’s important not to get too caught up in the rhetoric surrounding the referendum.
There will always be demand for homes and other properties in the UK from customers and businesses, and if history has taught us anything it’s that Britain is strong enough to bounce back, and any blip in property prices will only be temporary.
So don’t allow the Brexit debate to put you off looking into a mortgage and feel free to get in touch with one of our expert mortgage advisors absolutely free of charge.