What could Brexit mean for housing?
Posted on 21st June 2016
With the national Brexit vote approaching it is necessary to consider the effects that this vote could have on the housing situation in London and the UK. Amongst the many issues motivating the country’s vote, “Housing” appears to be one of the most important with people’s experience of the property market potentially affecting the way they may vote.
It is argued that an exit from the European Union will create uncertainty in the UK economy having a knock on effect on prices in the housing market. With these housing prices and rents predicted to fall, some have argued that this may lead to improvement in the current housing crisis. It is claimed that this fall in housing price will create much needed affordable housing in the UK and stimulate a supply of stable affordable tenancies.
In recent years it is apparent that there has been an increase in homelessness in the UK. A Joseph Roundtree Foundation survey at the end of 2015 highlighted that there are now 53,000 homeless households in the UK, an increase in 13,000 from figures five years ago. Furthermore those that are able to secure accommodation in the private sector are unable to find new accommodation at the end of their tenancy due to unaffordability. The amount of people living in poverty whilst housed in the private sector has doubled in the last 10 years to 4.2 million.
Additionally there are more 16 – 24 year olds living in poverty and homelessness than those aged over 65 in the UK. With the suggested fall in house prices and rent in London and the UK it is tempting to think that this may stimulate first time buyers and a younger generation of people in need of housing to obtain a property in the current housing market. The National Association of Estate Agents estimates that leaving the EU could lead to a decrease of £2,300 in UK house value by 2018 and a decrease of £7,500 in London. This is further supported by George Osborne’s claim that there is potential for an 18% decrease in house prices. With this projected decline it can be advocated that Brexit will benefit those struggling to find affordable housing and potentially local authorities in buying council house properties and temporary accommodation for those in need.
On the other hand it can be argued that leaving the EU will have a severe impact on the construction industry and the building of future homes in the UK. It is further advised by the NAEA that 1 in 20 workers in Britain’s construction industry are born in non-UK EU countries. It is therefore suggested that the loss in skilled workers may potentially lead to future issues in building of these new homes and development of housing areas.
In summary, it is uncertain for sure how the potential exit from the EU will affect UK housing and only the outcome of the upcoming vote and the future will hold the answers.