Property expert Jonathan Rolande has warned that reversing Brexit could have a mixed impact on Britain’s housing market and could push up rents and property prices.
Reports that the Prime Minister is open-minded about the possibility of the UK eventually rejoining the European Union have sparked widespread political debate.
But while the economic and political arguments have been extensively discussed, one important sector has received considerably less attention: housing.
According to property expert Jonathan Rolande, any impact on the housing market would be far from straightforward.
One of the biggest potential benefits could be an increase in the availability of skilled construction workers.
Housebuilders have struggled to recruit bricklayers, roofers, electricians and other skilled tradespeople since free movement ended. Reopening access to a wider European labour pool could help builders get workers onto sites more quickly and potentially reduce some construction costs.
Jonathan Rolande said: “If you can build more homes, more quickly and for less money, that has to be a good thing. There could also be benefits for the cost and availability of building materials.
“Products including timber, steel, kitchens and bathrooms imported from the EU could face fewer barriers and less paperwork if the UK moved towards closer European integration. That could help reduce delays and costs for housebuilders, while also potentially benefiting homeowners carrying out renovations. A return to greater freedom of movement could also increase demand from European buyers and investors.
London has traditionally attracted significant overseas investment, particularly at the higher end of the property market. With demand in parts of the capital having weakened in recent years, an increase in wealthy European buyers could provide a welcome boost.”
However, Mr Rolande warned that increased demand could also worsen Britain’s housing affordability problem.
He said: “The UK already faces a significant shortage of homes. If rejoining the EU resulted in more people moving to Britain, there would be more people competing for existing properties unless housebuilding increased at the same pace.
“That could put further pressure on rents and house prices, particularly in areas where housing supply is already severely constrained.
“It could be great news if you own several properties. But it is not quite such good news if you are trying to buy your first one.”
He also highlighted uncertainty as a major potential threat to the property market.
He said: “Rejoining the EU would not happen overnight. It could involve a referendum, years of negotiations and a lengthy period of uncertainty over the eventual terms of the UK’s relationship with Europe.
“Property markets tend to react badly to uncertainty, with buyers delaying purchases, developers postponing projects and lenders and investors becoming more cautious.
“There could also be regulatory implications for existing property owners. Closer alignment with the EU could potentially result in stronger energy-efficiency requirements, leaving owners and landlords of older properties facing significant costs for improvements such as insulation, new windows and heating systems.
Mr Rolande believes the fundamental issue remains Britain’s shortage of housing.
“The UK’s housing problem is fundamentally one of supply,” he said. “We do not need more people bidding against each other for too few homes. We need to build more homes.”
He concluded: “There are compelling arguments on both sides. Which is why, when it comes to property, the Brexit question really is still virtually 50/50.”
Jonathan Rolande is a property expert and one of the UK’s leading authorities on the housing market. For more information and property market insight, visit rolande.property.
