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Housing market slows down ahead of Brexit referendum
18 May 2016
Experts say that the housing market will be slowing down over the coming weeks.
This comes after landlords were rushing to complete property sales at the end of March before a rise in stamp duty – and due to uncertainty ahead of the EU referendum on 23 June. While it yet remains to be seen if Britain is to stay or remain in the EU, the referendum already has a negative effect on the property market.
In fact, according to Sky News, a £400m buy to let auction of mortgage lenders Charter Court Financial Services fell through due to concerns of the effects on a potential Brexit on the UK’s housing market on the part of the investor. In a press release by accountants KPMG, Andy Pyle, head of real estate at KPMG says that investors are holding back at the moment, as June isn’t that long to go.
According to the company, a number of estate agents take a negative view of what was to follow should Britain decide to leave the EU as well. A study undertaken earlier this year by KPMG revealed that 66% of global property investor participants believed that investment in British property would decrease long-term if the UK left the EU.
Another negative impact on the housing industry could be reduced immigration after a Brexit - a pronounced target of the Leave Campaign. This would mean less tenants and consequently less demand for housing.
However, there are also potentially positive effects of Britain leaving the EU on the property market: freed from European laws and regulations, there could be more investment, rather than less.
In the weeks leading up to the referendum at the end of June, however, the property market is already taking a hit from uncertainties about the result.