What is “Brexit” and how will it affect the property market?

Politicians have been making a lot of noise discussing the implications of Brexit. What is Brexit? Brexit is the decision on whether the UK decides to leave the European Union or remain within the European Union. A referendum will take place in the UK on the 23^rd June 2016 where the British public will decide the outcome. How should I vote? This is entirely up to each individual person depending on what they believe will be best for Britain. David Cameron, the Prime Minister, wants the UK to remain part of Europe and has recently negotiated better terms for the UK, however, some would argue with that. Some senior government members, including those within his own party, are calling for Brexit. How will it affect the property market? No one is entirely sure what will happen to the property market. People will still need to buy and sell property like before, but it may have an effect on people investing in property in Britain. Until investors see the impact leaving the EU (should this be the outcome) has on the UK property market the uncertainty may create some downward pressure. What about mortgage rates? Mark Cairney, the governor of the Bank of England, thinks that leaving the EU could lead to a rise in mortgage rates due to a run on the pound. Several investment banks, including Goldman Sachs, predict that a vote to leave will see the Sterling take a dip by a fifth of its value. We have already seen a dip in the Sterling since the Prime Minister, David Cameron, formally announced the referendum. Summary No one can deny there are risks in leaving the single market. Almost half of our exports go to EU countries. Over 200,000 British companies export to the EU. We receive an average of £26.5 billion of investment every year from other EU countries. So the message from most of the business community is the EU is best for business because the UK is the gateway to the European single market. The risks of leaving are obviously real. The leave campaigners’ argument is being in the EU prevents Britain from being able to change huge swathes of law and stops us being able to choose who makes critical decisions which affect all our lives. The Euro-sceptics maintain the Euro has created economic misery for Europe’s poorest. EU regulation has entrenched mass employment, its immigration policies have encouraged people traffickers and brought refugee camps to our borders. Conclusion Ultimately, Brexit is your decision but we hope this article is of some help in reaching your decision, particularly if you’re looking to invest in property or buying your next home.