EU referendum could hurt Britain's property market, says Savills

The uncertainty surrounding Britain’s membership of the European Union could be a threat to the British property market next year, according to a property group.

Real estate services provider Savills said on Wednesday that investment in the residential, commercial and agricultural property sectors could suffer a decline in the lead up to the 2017 referendum on the UK’s EU membership.

"The biggest risk to the commercial markets is that pre-vote period. Is it going to be three months, six months, nine months of speculation and the market may just go slightly quieter," Savills’ head of commercial research, Mat Oakley, was quoted as saying by Reuters.

"We have spoken to a number of people who've said we'll seriously consider moving our headquarters functions [...] and our growth over the medium term to long term may well be more skewed to the EU [...] if the UK were to leave."

The property group added it expects the average house price of prime property in London to decline approximately 2% this year, with central London, an area popular with foreign investors, set to bear the brunt of the uncertainty ahead of the referendum.

"I think that contributes to a slow prime central London market where obviously you have the biggest level of international demand," said Lucian Cook, Savill’s head of residential research.