EU referendum: Brexit risks compromising plans to build hundreds of thousands of new homes
If Britain votes to leave the EU it risks sparking a chronic construction skills deficit, compromising plans to build hundreds of thousands of new homes.
According to new research, a Leave vote could lead to a cut in the construction workforce, which would in turn jeopardise plans to expand the UK's housing stock that would otherwise ease the shortage in supply.
The Brexit report National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (ARLA) said that "while the impact Brexit will have on migration policies is unconfirmed, imposing greater restrictions on foreign workers coming into the UK may compromise the UK’s ability to build homes".
The government has pledged to build one million new homes by 2020.
UK nationals aren't filling those roles, the report adds, as construction-based jobs are decreasing in popularity among UK nationals, and as five per cent of current construction workers were born in non-UK EU countries, workers from non-UK EU countries are becoming more important than ever in filling the skills gap to boost housing stock.
Read more: Winners and losers in the London housing market
"An "out" vote could mean that in ten years' time we’d find ourselves with a severe skills shortage of construction workers," Mark Hayward, managing director, NAEA said.
"So even if we then had planning permission, investment and materials to build more housing, we simply wouldn’t have the resource to put the bricks and mortar together. It has the potential to have a very damaging effect on the future housing market."
However, the report added that a Leave vote could benefit first time buyers as demand for housing eases off.
Non-EU businesses are currently attracted to the UK’s status as a gateway to the single market as it allows them to establish and grow their presence across Europe, the report added.
"In 2014, 19 per cent (£5.3bn) of total FDI inflow into the UK came from EU sources, and in 2013, 17 per cent of sales in London’s prime property market made to non-UK recipients were to European nationals," it continued.
Read more: Khan plans to fast-track scores of TfL land to build homes
Therefore, in the event of Brexit, a portion of FDI would be re-directed to EU countries, thereby "freeing up" housing units, particularly in London, previously purchased through FDI for British buyers.
It's also thought that by leaving the EU, depending on the deal that is made, migration could fall, therefore making the market more accessible.
The rent market would also be alleviated, as demand would weaken.
David Cox, managing director at ARLA, said: "Those whose freedom to work and live in the UK is at risk of Brexit are a key demographic for the private rented sector. Current projections of demand for rental properties therefore could be offset by Brexit. If the sentiment towards London as a “safe haven” changes, the UK’s largest rental market will feel the brunt of a Brexit decision."