Chief economist at Yorkshire Building Society Andrew McPhillips looks at how the markets would react depending on the outcome of the EU Referendum.
In the event of a Remain vote house price growth is likely to slow as the UK is approaching its limit in terms of housing affordability which could reduce demand for properties.
That said, the ongoing lack of supply means that prices are unlikely to fall at least in the short-term.
If the UK votes to Leave the EU, demand for properties is likely remain fairly strong as people will still want to own a home. Although demand could fall to some extent, the lack of supply is likely to mean that house prices will continue to grow, albeit at a reduced pace.
That said, if the Bank of England does not cut the Base Rate, wholesale funding costs for lenders could increase, which may lead to reduced availability of credit. This would further reduce demand, which could cause house prices to fall.
London could be hit hardest by a drop in demand as foreign investors are likely to postpone buying properties until the full implications of the decision are clear.”