Brexit would drive house prices up sharply, housebuilders warn

If the UK votes to leave the European Union on the 23 June referendum, housebuilders have warned that it could lead to a shortage of skilled construction labour, constrain investment in new house building work and so further worsen the country's housing shortage.

The construction industry is already suffering a shortage of skilled workers and the Home Builders Federation admitted the industry was already reliant on overseas labour and would need it even more if the housing shortfall was to be closed.

Data last month from the Royal Institute of Chartered Surveyors (Rics) showed construction wages rose by 6% in 2015, well ahead of the 2% UK average, due to the shortage of workers, together with a majority of firms reporting a sharp rise in wage costs and an overwhelming majority reporting financial constraints as net lending to construction firms dropped in the fourth quarter of 2015.

“Whilst the industry is recruiting heavily and training thousands of young people it does currently rely on skilled labour from abroad," the Home Builders Federation told Inside Housing.

“If it is to maintain the significant increases in output of the past two years it is imperative it has access to an adequate supply of labour. In the event of us leaving we would certainly be pushing government hard for guarantees that sufficient skilled foreign labour would be accessible.”

The Federation of Master Builders also added that it was concerned that leaving the EU “could mean cutting off an important supply of labour at a time when the construction industry is already experiencing serious skills shortages”.

Credit agencies Fitch and Moody's warned Britain voting to leave the European Union will also weigh on confidence, delay investment decisions and possibly lead to a negative outlook for government debt.

Sterling fell to a seven-year low on Monday after several leading Tory figures stated their opposition to David Cameron's proposal to remain in a reformed European Union, as the Prime Minister officially confirmed the referendum date of 23 June.