George Osborne claimed this week that average house prices could fall by as much as 18% if the UK votes to leave the EU next month. Equally concerning for landlords is the suggestion that mortgage rates could rise as a result of a Brexit.
A vote to leave would likely cause a short-term economic jolt, which may well result in higher interest rates and a dip in house prices. For highly geared landlords with a lot of borrowing, these effects could be very damaging.
Meanwhile, some are questioning whether a drop in house prices could actually be a positive for the UK, where the average first time buyer is now in their late 30s.
House Price Index figures released by the Office for National Statistics last week confirmed that UK house prices have increased by 9% during the twelve months to March 2016. Here in Worcestershire, the average price of a home has now reached £233,932, up 5% since this time last year.
While property industry commentators continue to argue over whether Brexit would be damaging or positive for the property market, I personally suspect that the impact would vary hugely from one region to another.
In London, reduced foreign investment into property and banks could lead to falling prices and higher interest rates as demand falls. Having said that, the supply of new homes still falls a long way short of the numbers needed, which should cushion the blow.
Back in Worcestershire, foreign investment is a less significant factor and home prices remain strong on the basis of robust economic growth in the region, low unemployment and an ongoing housing shortage.
Bearing in mind that buy-to-let is generally a long term investment; I suspect that whatever the referendum result, over the long term Worcestershire property prices will continue to be driven by the same factors; a shortage of suitable homes and rising rents as a result.