Real estate investors believe the UK leaving the European Union would have a negative effect on UK real estate, according to research from international law firm, Nabarro.
The threat of a ‘Brexit’ became real in the wake of the UK’s general election in May, which saw the Conservative party take an unexpected majority. The new government has pledged an in or out referendum on EU membership by 2017 and the post-election signals from Downing Street suggest it could be held as early as 2016.
Nearly two-thirds (64 percent) of the 250 investor respondents to Nabarro’s poll believe an exit from the European Union would be “very bad news”.
“It is clear from the survey results that the commercial real estate sector does not want the UK to leave the European Union,” commented Ciaran Carvalho, head of real estate at Nabarro.
Yet, despite the Nabarro survey showing that the majority of investors fear a ‘Brexit’, an even stronger majority (72 percent) of respondents say they will not delay investment decisions ahead of referendum on UK membership of the EU.
“At the moment this possibility is not affecting investment decisions, as most remain sceptical that it will actually happen,” added Carvalho. “However, just as the Scottish Referendum race became close over time, there is a chance that the campaign for Britain to leave the European Union will gather momentum as the vote nears, which could lead to a slowdown in activity.”
In 2014 a Nabarro poll found strong opposition to Scottish independence, with 81 percent saying they would be less likely to invest in an independent Scotland.
With independence no longer an issue in the short-term, the question this year was angled more towards the rise of the Scottish National Party in the wake of its spectacular results in the general election. Only 3 percent said they would be more likely to invest in real estate in Scotland as a result of the rise of the SNP, with 65 percent saying they would be less likely to invest.
A Brexit-focused survey running on PERENews.com shows dissimilar opinions with 35 percent of respondents both agreeing and disagreeing that a Brexit would make the country a worse private real estate investment proposition. The remaining 30 percent believe it is too early to tell.