Does being in the EU help or hinder property markets? This was a key question posed by Radio 4 Today programme presenter, John Humphrys, who chaired a panel of real estate experts at JLL’s UK property predictions event last week.
“Being in the EU helps the property industry,” said John Duckworth, Head of Occupier Services, JLL UK. “An example is the construction industry where the UK is suffering from a severe skills shortage. A positive immigration policy undoubtedly helps to resolve this. It is clear that being out of the EU Is likely to hinder the UK property industry.”
Although he said that the fall out would not be dramatic, ‘caution would creep in’ among investors and businesses and leaving the EU would ‘raise real long term question marks about the UK’s economic stability and prosperity’.
This is in contrast to a nameless City economist who the panel referred to over their recent claim that the UK economy would ‘vanish for ten years’ if Britain was to leave the European Union. The panellists agreed that this was hyperbole but with 46 per cent of FDI from the UK in Europe and 45 percent of exports to the EU, the implications are certainly serious.
John Neale, Head of UK Research, JLL, said that the long term concern should be around the future economic prosperity of wider Europe, rather than just the UK.
“What is the effect on everyone else?” Does it encourage further break up?” he asked.
Neale predicts that ‘Brexit’ would result in five years of uncertainty and it would make the entire region less competitive. At a geopolitical level, he said it would fracture the western alliance when it comes to facing major issues of foreign policy.
Trade relationships, in particular, would likely suffer. With the next decade set to see even greater economic focus on the rising middle classes in Asian countries, the panel questioned how China would view the UK if it were to exist outside of the EU.
Offering a counter view, Katie Kopec, Director of Development Consultancy, JLL UK, said one potential benefit of leaving the EU would be a freer bidding process for development of land. “The red tape around public sector development procurement processes is a real deterrent to the private sector. Clarity and relaxation of its use would be a real fillip to getting more development through faster.”
Read JLL’s full UK property predictions across multiple sectors.
Lead Director, UK Occupier Services, JLL