A REFERENDUM vote to leave the European Union would pose a serious challenge for the UK property market, according to new research.
As the Prime Minister embarks on a renegotiation of EU membership terms, findings from a poll of property experts show that nearly two thirds, 65 per cent, believe that a Brexit would have a negative impact on investment in UK property.
However, only 10 per cent of those surveyed in the Carter Jonas poll said they would consider relocating their business to another EU country in the event of a vote to leave.
Darren Yates, head of research at the property agent, which has four offices in Yorkshire, said: “Whilst the EU referendum campaign is still in its early stages, the majority of the property industry are concerned that a Brexit would make the UK less attractive for investment.
“There is a distinct uneasiness about leaving the European Union. Only around a fifth of those polled - 22 per cent - believe that a Brexit would have no effect on investment, while just 13 per cent think that it would have a positive impact.”
However, the poll also suggests that a potential Brexit is only one of the major challenges facing UK property over the next two years.
Respondents also highlighted concerns about the housing shortage, rising construction costs and the prospect of higher interest rates, in addition to the property industry skills shortage and planning reforms.
David Aspland, partner and head of commercial, based in the Leeds office, said: “Regardless of the ‘in or out’ debate, people in the property industry want certainty. As we saw before the referendum on Scottish independence, many occupiers and investors delayed their decision-making.
“We expect a similar ‘wait-and-see’ approach as the EU referendum draws near, which could impact on sentiment and activity.”
He added: “While UK plc will survive whatever the outcome, a Brexit would lead to more uncertainty while the new arrangements were negotiated.”
Mr Yates said: “If there is a vote to stay in, we would expect a swift return to ‘business as usual’. However, should we vote to leave the EU, the potential impact is likely to vary across different parts of the market.
“Ultimately, it will depend on the nature of the new UK-EU relationship but, for example, there would initially be questions around the degree of market access to the EU for UK manufacturers and financial services firms.
“There would also need to be clarity around future support for the UK farming industry.”
However, Carter Jonas remains optimistic that in the longer term, in or out of the EU, the UK would remain an attractive place to do business.
“While there are some serious home grown challenges such as the housing shortage which need to be addressed urgently, the UK still offers one of the most transparent and sophisticated property markets in the world,” it said in a statement.
The survey comes as a separate report shows that Leeds has secured £3.7bn of commercial property investment in the past decade, ranking as the fifth UK city outside of London for attracting investment.
CBRE’s report, Core Cities, Core Strengths, which analysed 12 regional cities, showed that in total £44.4bn was invested.
While Manchester took the number one spot in terms of volume, Leeds performed better in the per capita ranking. Investment in Leeds in the last 10 years equates to £4,918 per capita putting it ahead of Manchester and Birmingham.
Investment in Sheffield reached £2.8bn, ranking it eighth in terms of volume. It equates to £3,265 per capita, ahead of Birmingham and Nottingham.