Opinion

What Would EU Departure Mean for British Property Market?

The eyes of the world are on Britain and the European Union (EU), as debate continues over a possible separation. While US president Barack Obama has publicly come out against such a move, the UK must begin to question the implications of such a cessation on the economy and the property market.

On January 9th, Washington told British journalists that it believes the future of the "special relationship" is best served by staying in the EU. This follows months of private warnings to David Cameron that exiting the union is ill-advised and comes days before the prime minister plans to announce a referendum on the issue.

Philip Gordon, assistant secretary for European affairs, stated: "We have a growing relationship with the EU as an institution, which has an increasing voice in the world, and we want to see a strong British voice in that EU. That is in America's interests. We welcome an outward-looking EU with Britain in it."

While it is no doubt vital the UK does what is in its own best interests, there is concern that the country will become alienated if it exits the EU. Such a move could also pose problems for the property market, as fewer European citizens move to the country or invest in real estate. Nevertheless, the impact severing official ties with the EU would have on property is questionable. This is especially true in London, where demand is largely driven by Asian investors.

As it stands, the future is uncertain and a referendum on the issue could change the face of international relations. It has been claimed that while Mr Cameron does not want a complete cessation, he desires a looser relationship in which Britain has certain power repatriated. Distances the UK from the EU is also another way to protect the power of the pound, at a time when many countries in the union are facing debt crises. However, it is unlikely any action will take place before 2017 or 2018, giving the property market time to brace itself against such a move.

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