Expert predicts reduction in rents and house prices
PUBLISHED: 13:33 27 June 2016 | UPDATED: 15:05 27 June 2016
The UK's decision to leave the EU is likely to result in a reduction in rents and house prices, according to one property expert.
Michael Holmes, spokesperson for The Homebuilding & Renovating Show, predicts a significant reduction in immigration, which will then reduce demand for housing and most likely lead to a fall in rents and house prices.
He says: “Some people would welcome this, but if house prices were to fall, this is likely to have a negative effect on the UK economy.
“Another impact of reducing immigration could be to starve the construction industry of much needed skills from overseas.
“Unless this was compensated for by a points based immigration system that places value on construction skills, the shortage could restrict the Government’s ability to meet its house-building targets.”
Michael adds that, “many home buyers stalled their decision-making pending the outcome of the Referendum – whether those missing sales will come back remains to be seen.”
He also warns that the falling value of the pound since Friday “could lead to an increase in interest rates to defend the value of the currency. If this was to happen, it would be likely to have a negative impact on property prices.”
However, he’s confident that these consequences would be short-lived, saying: “Given the long-standing imbalance between demand and supply in the UK housing market, it is likely that prices would recover in the medium term.”