Closer ties with the European Union could help tackle Britain’s construction skills shortage but risk putting additional pressure on house prices and rents, a property expert has warned.
The assessment follows Prime Minister Andy Burnham opening the door to a rethink of Britain’s relationship with the EU, including potentially rejoining the single market or ultimately the bloc itself.
Any change that restored greater access to European workers could help housebuilders recruit skilled tradespeople and potentially reduce some development costs.
But Jonathan Rolande (main picture) warns the benefits for housing supply would need to keep pace with any increase in demand resulting from greater movement between Britain and Europe.
CONSTRUCTION SKILLS
Construction has been among the industries affected by the end of EU free movement, with housebuilders facing shortages across a number of skilled trades.
Rolande says greater access to European labour could help increase housing delivery.
“If you can build more homes, more quickly and for less money, that has to be a good thing. There could also be benefits for the cost and availability of building materials.
“Products including timber, steel, kitchens and bathrooms imported from the EU could face fewer barriers and less paperwork if the UK moved towards closer European integration. That could help reduce delays and costs for housebuilders, while also potentially benefiting homeowners carrying out renovations.”
HOUSING DEMAND
However, Rolande warns any increase in migration associated with closer EU integration could add to housing demand unless accompanied by greater development.
He says: “The UK already faces a significant shortage of homes. If rejoining the EU resulted in more people moving to Britain, there would be more people competing for existing properties unless housebuilding increased at the same pace.
“That could put further pressure on rents and house prices, particularly in areas where housing supply is already severely constrained.
“It could be great news if you own several properties. But it is not quite such good news if you are trying to buy your first one.”
Rolande also warns that a prolonged political process surrounding any fundamental change in Britain’s relationship with Europe could create uncertainty for the housing market.
He adds: “Rejoining the EU would not happen overnight. It could involve a referendum, years of negotiations and a lengthy period of uncertainty over the eventual terms of the UK’s relationship with Europe.”
SUPPLY REMAINS KEY
Rolande argues the eventual impact on housing would ultimately depend on whether Britain was able to increase supply alongside any increase in demand.
“The UK’s housing problem is fundamentally one of supply,” he says. “We do not need more people bidding against each other for too few homes. We need to build more homes.”
He adds: “There are compelling arguments on both sides. Which is why, when it comes to property, the Brexit question really is still virtually 50/50.”
