There are still eight weeks to go until the EU referendum, but we already find ourselves buried under an avalanche of claims and counter-claims of the impact of Brexit. Every day, a new battle is fought over the potential effect of a leave vote on healthcare or crime, scientific research or even low-cost air fares!
It is, as always, the impact on the economy - on trade, employment and growth - which is most important to most people. The recent weakening of the pound has been explained by uncertainty over the vote with dire warnings that this is just a taste of things to come.
While the overwhelming majority of us buy property as a home, rather than as an investment, there is no doubt that it forms a major part of the UK economy. Estate agents Savills have valued Britain's residential housing stock at over £6 trillion. The way property prices move directly affects our overall economic confidence and spending patterns.
For those thinking of buying or selling property soon, the potential impact of a Brexit vote is even more pressing. After all, uncertainty over the Scottish Referendum was said to be the cause of a 10 per cent drop in prices prior to the vote. The question for both home buyers and sellers is, should you try to rush a deal through before June 23, or wait to see if they gain from the impact, either positive or negative, on prices.
As a business which allows people to invest in property in the same way as they invest in shares, this is a matter of more than passing interest for us too. It is not easy to predict, of course, as the outcome of the referendum seems less certain with every passing day. But working out the potential impact is also complicated by the fragmented nature of the UK housing market.
Outside of the 'prime' London market, it is not exchange rates or an exodus of high-earning foreign bankers which will determine future prices, but the basic economics of supply and demand. Whether the UK remains within the EU is not going to alter this longstanding imbalance, which is the main driver of price.
The situation is not as clear cut in central London. The gulf between the property market in the capital's prime residential areas and the rest of the city is as great as it is between London and the UK as a whole. It is central London where most foreign buyers are and where potential price rises can be regarded very much as investment returns.
In these postcodes, prices have been flat or falling for months now. Prime London developers, who through the recent boom secured sky high prices and sizeable deposits for luxury flats - largely from overseas investors - are now under pressure. Contracts are being torn up or apartments sold prior to completion at big discounts.
But while the timing of the EU referendum has contributed to the downward pressure on this niche market, it is the big hike in stamp duty on expensive homes which has been the principal cause of the slowdown. With a budget of £1.5 million, you would be lucky to buy a two-bed flat in Chelsea. The government's recent stamp duty changes add an eye-watering 12 per cent to the purchase costs of primary residences above this price, and 15 per cent if it's a second home or buy-to-let. It is these huge transactional costs which are causing this price correction.
So could this spill over into the main market?
We are sceptical about this. Residential property, outside of a few super-luxury developments along the river Thames, is a stable and illiquid asset class. Although this is not yet reflected in house price data, anecdotally, we think the EU referendum may create a 'pause' effect, as people wait on the result before entering the market. This is what happened in the lead up to the 2014 Scottish referendum, and also prior to the General Election last year.
But our expectation is that the EU referendum will represent no more than a blip in the overall market cycle. Such a pause effect would be likely to affect the number of market transactions, reducing the supply of properties for sale and, conversely, increasing demand for those that remain available.
Fundamentally, people will always need a place to live, and Britain is simply not building enough homes to meet this demand. If only it was as easy to decide whether the Leave or Remain camps are right on long-term growth, employment, immigration and low-cost air fares.Suggest a correction