WHAT does brexit mean
for housing need?

The PM has confirmed that in triggering Article 50 in March, the UK Government will be seeking a ‘Hard’ Brexit. That is, full removal from all EU institutions, including the European Courts of Justice and the Single Market.

The PM has confirmed that in triggering Article 50 in March, the UK Government will be seeking a ‘Hard’ Brexit. That is, full removal from all EU institutions, including the European Courts of Justice and the Single Market.

So what will this mean for housing need in the future?

There are a few hints in the PM’s speech that suggest that net international migration is unlikely to materially change for several years:

  • The PM proposes to retain the Common Travel Area with Ireland, which has been in existence since before either were part of the EU. This will ensure that migration between the UK and Ireland will continue much as it always has
  • The PM wants to ensure the rights of EU citizens already in the UK are guaranteed, with the rights of British citizens in EU countries similarly protected. This will mean that there will be no policy of repatriation on either side and consequently we are unlikely to see sudden changes in migration flows.
  • The PM makes clear that she wishes to control immigration from the EU, which seems to suggest that level of net migration from outside of the EU will continue. This is not surprising as tightening migration controls whilst seeking to negotiate trade deals would be highly counterproductive
  • The PM highlights the importance of science and innovation to the UK economy, and that there is still a wish to collaborate with Europe. As such it seems unlikely that there will be significant obstacles to employing highly skilled professionals from EU countries. It might also suggest continued involvement in university exchange programme.
  • Finally, the PM made clear that she would be seeking a phased transition out of the EU beyond the two-year deadline. This is likely to be code for, it’ll take longer than two years to agree a free trade agreement with the EU, and we do not want to lose access to the Single Market in the meantime. Since the Single Market and Freedom of Movement are inextricably linked, it seems probable that net migration with the EU will continue as before well beyond March 2019.

 

The net result of these hints seems to be that nothing is likely to materially change up until March 2019 at the very earliest. After that it will depend on the timing of a free trade agreement with the EU, which could well take several years. Even then it seems highly unlikely that net international migration will fall to the level of ‘tens of thousands’. To achieve this would likely require a far more protectionist strategy that would be contrary to the ‘Global Britain’ aspiration set out by the PM.

The effect on housing need in the short term therefore is likely to be negligible, particularly when considering that the UK National Population Projections continually underestimate net international migration. In the longer term, there could be a decline in housing requirements in peripheral markets. However, it seems likely that London and the Golden Triangle will still be able to attract the workforce it requires either from elsewhere in the UK or internationally. As such, these core markets are likely to continue to see high levels of housing need well into the future.

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