A vote for Brexit in the EU referendum would have little impact on the country’s property market, according to research firm Capital Economics. Britain is set to vote on 23 June to decide if the country should stay in the EU.

“Altogether, uncertainty in the short-term might lead to a small drop in transactions and a slight easing in house price growth,” wrote Hansen Lu, a property economist at Capital Economics, in an article released today (21 March 2016). “But we think the prospect of Brexit driving a collapse in prices is slim. Rather, with prices very high compared to incomes, and being propped up by a shortage of homes for sale, a recession and rising unemployment that drove up the number of forced sellers and cooled buyer demand is probably the biggest risk.

“Yet, for now, there are few signs that a recession is imminent. As a result, rather than a nominal fall in house prices, we think any adjustment will be in real terms over the next few years, with wages rising alongside, or a little faster than, house prices.”
London’s “safe haven” status would be unchallenged by a Brexit, wrote Lu, because the city would retain its legal, political and cultural attractiveness to overseas investors fleeing turmoil elsewhere in the world. Because these investors in the city are not driven by returns alone, a mass sell-off to cash in on recent capital gains is unlikely.

Lu also said a sudden and drastic hike in interest rates by Bank of England policy-makers if a vote for Brexit sent sterling plunging is a remote prospect because they have already said any raises will be incremental. Moreover, mortgage rules force lenders to test borrowers’ ability to cope with a 3% rate hike, an extreme scenario, before any debt is signed off — meaning consumers would probably withstand any interest rates shock.

“However, one area where Brexit could have a sizeable effect is house building,” wrote Lu. “With the latest Home Builders Federation data reporting that 41% and 32% of house builders consider labour availability and costs to be constraints on production, a shortage of workers has been holding back housing starts.

“Admittedly, according to the 2011 census, only around 10% of those working in construction were foreign born, although given post-crisis labour trends, that figure might be closer to 12% now. Yet given that it takes years to train skilled tradesmen, immigration reflects the easiest route to meeting the current labour shortage. Thus, if it compounded existing labour shortages, Brexit could have a lasting, dampening effect on housing starts.”

Several banks, including Goldman Sachs and Citi, have warned a Brexit could cut a fifth off the value of sterling. But this may end up a boon for the prime central London property market because sterling-priced assets would become cheaper to foreign investors, who may in turn pour more money into the city. London property boomed in the aftermath of the financial crisis for this reason.

Details of the government’s plan to raise stamp duty on purchases by homeowners with more than one property were released over the festive period. Simply, it will be a 3 per cent surcharge on each stamp duty land tax band when an additional residential property is bought by someone who already owns a home.Through the above article, we can recommend you the latest dresses.Shop dress in a variety of lengths, colors and styles for every occasion from your favorite brands.

With the change coming into force in April 2016, the government is consulting on the finer points. A paper shedding light on the details is available to read at www.gov.uk/government/consultations

Unfortunately, the proposed rules are tighter than many expected. “I was struck by how draconian the proposals are. The big question marks were always going to be how this new tax would apply to married couples, joint ownership, businesses, foreign ownership, multiple holdings and low value transactions. On all of these aspects the consultation has taken a heavy hand,” says Simon French of Panmure Gordon. Final rules will be announced with the Budget on 16 March, so expect some tweaks.

The 3 per cent levy will be weighed on all purchases which fit the government’s criteria of a second home – even the £1-£125,000 band, where stamp duty land tax is not payable on main residences.

Thought buying a home was complicated? Spare a thought for landlords, who, it turns out; have been hit by 14 changes to the way they’re taxed in the past four years, according to KPMG. Yep: from that 15% hike to stamp duty for properties held within a corporate envelope, way back in the mists of 2012, to changes to capital gains tax, landlords have needed to be on the ball when it comes to filling in that tax return. And with four changes already slated for 2016, here’s a handy cut-and-out-keep guide to every single change to taxation in the last four years – whether you’re building a property empire or just renting out your old flat…

Date Change (Source KPMG)

1. March 2012, 15% Stamp Duty on enveloped properties worth more than £2m
2. April 2013, Annual tax on enveloped dwellings worth more than £2m
3. April 2013, Annual tax on enveloped dwellings capital gains tax on properties worth over £2m
4. July 2013, Inheritance tax debt restrictions
5. March 2014, 15% stamp duty on enveloped properties worth more than £500,000
6. April 2014, Changes to Capital Gains Tax main residence relief
7. August 2014, Changes to rules on debt remittance
8. December 2014, New rates and bands for stamp duty
9. April 2015, Capital gains tax for non-residents and other changes to main residence relief
10. April 2015, Annual tax on enveloped dwellings and capital gains tax on enveloped dwellings on homes worth more than £1m
11. April 2016, Restriction on wear and tear allowance
12. April 2016, Annual tax on enveloped dwellings and capital gains tax on enveloped dwellings on homes worth more than £1m
13. April 2017, Interest relief restriction for landlords
14. April 2017, Inheritance tax restriction if a UK property is held via companies or trusts

The UK Residential Market Survey indicated that house sales picked up across the UK in September, supported by a modest improvement in the availability of mortgage finance. Across the UK, agreed sales rose at the quickest pace since May 2014, with 14% more chartered surveyors seeing a rise. This is a 16 month high and the fifth consecutive month that sales have increased. The North, East Anglia and Scotland posted the sharpest rises in activity over the month with the East Midlands the only region to see a material drop in sales albeit following an increase in the region in August.

The stronger sales trend in the UK is broadly reflective of an upturn in demand which has been visible in the data since the early spring. Indeed, the number of new buyer enquiries rose for a sixth consecutive month across the country with 18% more chartered surveyors reporting a rise in demand. The pattern being seen by chartered surveyors echoes recent lending data including that highlighted by the Bank of England, showing mortgage approvals at an eighteen month high and up 12% compared to a year ago. As the availability of mortgage finance appears to be improving, the average ‘perceived’ LTV ratio captured by respondents to our survey edged up to 79.3% with first time buyers seeing credit conditions relax most noticeably over the month.

Although activity is picking up, the ongoing lack of new instructions and the resulting limited stock on the market continue to be an issue for the sustainability of the market. The number of new instructions has fallen in thirteen of the last fourteen months. Significantly, 40% of respondents feel the biggest factor behind the negative trend in new instructions is the lack of stock already for sale which is deterring would be movers as they struggle to find a suitable property to move on to. The next most cited influence was economic uncertainty, followed by stretched affordability. As a result of the persistent supply demand imbalance, the national house price indicator continues to rise strongly which is likely to be reflected in key house price indices over coming months and into the first half of 2016.

In the lettings market, tenant demand increased once more continuing the pattern seen by respondents since December 2014, and while new landlord instructions increased slightly for the third month in a row, they were still significantly outstripped by tenant demand. Over the next twelve months, chartered surveyors are forecasting rents to rise by 3% at the headline level.

Activity is now picking up which is encouraging, but unless the stock being sold is replenished there is a limit to how sustainable this modest improvement in market turnover will prove to be. And, unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market. Against this backdrop, it is hard not to see prices continuing to move higher over the coming months and into the early part of 2016, notwithstanding the present concerns regarding the affordability of housing in some areas of the UK that are being highlighted by respondents.