How will leaving the EU affect the UK housing market?

wateva

Hi All,

I have been house hunting for almost 18 months. In recent times I have seen a sharp rise with house prices which I put down to the lack of supply within the area I reside. One house I went to view yesterday was priced at £215k whereas a house on the same street in a better condition was marketed at £185k last year November so just goes to show how much house prices have risen within a short amount of time.
However the recent movement with leaving the EU has got me thinking will the house prices continue to rise or will there be a drop? Will buying now leave me in negative equity in a few months to come if the house prices did drop? What impact will it have on interest rates?

AdrianC

wateva wrote: »

However the recent movement with leaving the EU has got me thinking will the house prices continue to rise or will there be a drop?

Nobody knows. Lots of people can take various guesses, which will mostly be based on their own preferred outcome. Nobody has ever been able to predict the markets with any degree of accuracy, even without the uncertainty of a referendum like this. Anybody who could would be able to become very, VERY rich as a direct result of using the information themselves, so thoroughly disinclined to share their secret.

Will buying now leave me in negative equity in a few months to come if the house prices did drop?

If prices drop to a level below your remaining debt on the property, then - yes - you will be in negative equity. If the property is worth £100k, and you have £90k of debt, then a drop in value to £89k will leave you in £1k of -ve equity. If it drops to £91k, you will still have £1k of +ve equity (or, simpler, equity).

What impact will it have on interest rates?

See the first answer.

Miss_Samantha

If you look at the reasons why some people want to leave the EU, or at the likely economic effect of leaving the EU (even if short-ish term) then the effects are likely to be 'bad', if by 'bad' we mean lower property prices and/or higher interest rates.

However, the key aspect IMHO is that no-one can tell us what leaving the EU would actually mean. Therefore it is impossible to predict the full effects.

Marktheshark

How do you think halting 1100 people a day arriving in the UK with Nowhere to live effect house prices ?

It is a supply and demand market, just look at the Europhiles on MSE, buy to let two bit landlords desperately begging us to vote remain so they can keep lining their own pockets with rents skyrocketing.

G_M

A vote to leave =

* immediate expulsion of thousands of illegal & (semi) legal immigrants
* exodus of EU-based companies and hence of their EU citizens working in UK
* huge drop in demand for housing
* huge drop in property prices, forcing millions into negative equity
* massive job losses, leading to property repossessions further flooding the market at low prices
* millions of young people suddenly finding property prices in reach, so leaving th rental market
* temporary flood of BTL properties onto the market as LLs panic
* suspension of all house building due to property price crash, leading to yet more job losses and repos
* bankrupcy of most house builders, leading to stock market crash
* winding up of pension funds due to stock market crash. Inability of governement to meet pension compensation claims. Government resigns.
* Nationaisation of all property by new incoming Labour government.
* redistribution of all property, based on a) need b) individual's classification (worker Vs Capitalist Roadster) and c) connections with new government

Miss_Samantha

Marktheshark wrote: »

How do you think halting 1100 people a day arriving in the UK

This is an extrapolation, or just wishful thinking, because as I've just written no-one knows what leaving the EU would actually mean.

alchemist.1

There is no way of telling but i hazard a guess as nothing changing drastically.

The anti immigration lot will be in for a surprise. Even if we do vote out as there will be new agreements on trade and free movement of workers signed between the UK and the EU.

AnotherJoe

A vote to leave wont result in anything " immediate" LOL.

And it certainly wont result in expulsion of illegal immigrants since (a) they are nothing to do with EU and (b) there arent the people or processes to make it happen now ( a report last week said 50% of current deportations fail since the officials don't turn up or do things correctly). So how would they get rid of more ?

I can't make out if the rest is tongue in cheek or the scaremongering of a lunatic.

Miss_Samantha

alchemist.1 wrote: »

The anti immigration lot will be in for a surprise. Even if we do vote out as there will be new agreements on trade and free movement of workers signed between the UK and the EU.

There's not even any need for new agreements for this to be the case, actually.

AdrianC

Marktheshark wrote: »

How do you think halting 1100 people a day arriving in the UK with Nowhere to live effect house prices ?

Is that a figure that you've plucked from the ether? Because it isn't an actual real one...

Net migration to the UK in the year to September 2015 was 323,000 - 884 per day - but that includes non-EU nationals (which the UK has absolute control over) and British citizens.
Total immigration to the UK from citizens of other EU countries was 257,000 - 704 per day
Net migration to the UK from citizens of other EU countries was 172,000 - 471 per day

AdrianC

G_M wrote: »

A vote to leave =

* immediate expulsion of thousands of illegal & (semi) legal immigrants
* exodus of EU-based companies and hence of their EU citizens working in UK
* huge drop in demand for housing
* huge drop in property prices, forcing millions into negative equity
* massive job losses, leading to property repossessions further flooding the market at low prices
* millions of young people suddenly finding property prices in reach, so leaving th rental market
* temporary flood of BTL properties onto the market as LLs panic
* suspension of all house building due to property price crash, leading to yet more job losses and repos
* bankrupcy of most house builders, leading to stock market crash
* winding up of pension funds due to stock market crash. Inability of governement to meet pension compensation claims. Government resigns.
* Nationaisation of all property by new incoming Labour government.
* redistribution of all property, based on a) need b) individual's classification (worker Vs Capitalist Roadster) and c) connections with new government

Satire, I presume?