There are just over three weeks until the British public take their country’s fate into their own hands. There could be a very different world waiting beyond the polling stations, and opinions continue to be divided on what will happen. We asked the housebuilding industry if their foundations would be shaken by a Brexit, and the vast majority responded that Britain leaving the EU would have a negative impact.
44% said that a Brexit would lead to labour shortages and economic uncertainty, with a further 22% responding that it would impact the housebuilding industry negatively for different reasons. An equal number (22%) believed that Brexit would be positive for the house building industry. 11% simply didn’t know.
Uncertainty plays a starring role in the Remain campaign, and according to some industry players it is already affecting business. “Some construction consultancy businesses in the UK who rely on overseas clients are already claiming to have been adversely impacted as a result of the uncertainty over the country’s future,” said Mark Griffin, Business Development Director at CRL. “With less than a month to go there is still uncertainty over the benefits a stay or leave vote will have for many – including those within the construction sector, who are understandably nervous about nailing their political colours to the mast in public.”
Housing developers have warned that foreign investment in UK property would slow down if Britain left the EU, stunting an urgent supply of new homes. “Many of our potential customers have put off their decision to move further up the ladder until the result of the EU referendum is known and it is my belief that a vote to leave will only further deter investment in UK property,” said Andy Hill, Chief Executive of Hill. “It is widely acknowledged that we need to build more homes more quickly, with more than 1 million required by 2020. Without investment coming into the UK at current levels however and demand diminishing significantly, developers would likely pull away from building more homes and this figure will be incredibly difficult to meet.”
The remain camp fears that not only will there be less investment for new homes, but fewer people to build them. John Tutte, Chief Executive of Redrow, said that his biggest concern about Brexit would be a potential labour shortage, as EU workers currently make up 10-20% of the workforce. “An exit inevitably would have some impact on the workforce against the background of a skills shortage,” said Tutte. “For me the biggest fear that I have got in the event of a Brexit is what the medium-term impact will be on the workforce.”
However, according to John Elliott, Managing Director of Millwood Designer Homes, Britain’s housing market is home grown and many initiatives set by EU law are detrimental to the housebuilding industry. “Under the EU Habitats Directive there are particular constraints for the building of new homes,” said Elliot. “Firstly, the mere hint of great crested newts which are prolific in the South East of England on a site, can delay the building start for many months. However, in Northern Europe the crested newt is rare and is given special protection. This regulation to suit Europe has an unnecessary impact on the UK. If they are found, they have to be ‘translocated’ and caught and taken somewhere else for release.
“More recently the European Union’s Mortgage Credit Directive effectively means that no housebuilders are now able to lend money to their buyers unless they register as a regulated Financial Adviser. When times are difficult, it has been a traditional way for housebuilders to help their buyers overcome mortgage down-valuations and other issues. Obviously I do not know whether the worst of these directives will be repealed should we achieve Brexit but, for certain, it would reduce the continual flow of yet more ‘red tape’.”
With so many impassioned arguments from both sides, it is perhaps not surprising that 11% of respondents remained on the fence. As the debate gets more heated, it may get harder to see reason beyond the rhetoric. “Unfortunately our research shows that the people who run small construction firms feel that the ongoing debate over Brexit has done little to enlighten them on the issues that really matter,” said Brian Berry, Chief Executive of the FMB.
“This is perhaps a reflection of how few of the impartial facts that are so widely craved have actually been offered by either side,” he added. “No wonder then, that the vast majority of builders will be opting to vote based on their wider personal beliefs, when the economic and business case of each argument remain so unclear.”
What is clear is that Brexit is currently the biggest question facing the housebuilding industry, and the right arguments could still sway those who remain undecided. Everything is left to play for on 23 June…
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