First-time homebuyers in the UK would benefit from a vote to leave the EU, according to a leading ratings agency. Moody’s said a fall in house prices triggered by a Brexit would make it more affordable for people trying to get on the property ladder for the first time. “First-time buyers would benefit from lower competition for housing, as house price and rental inflation would slow down if immigration is curbed,” said Gaby Trinkaus, a vice president and senior analyst at Moody’s. Trinkaus added that whatever the outcome of next month’s referendum, the outlook was picking up for first-time buyers in the capital. “Regardless of the referendum vote, the ambitious affordable housing agenda for London following the mayoral election will help those looking to get on the housing ladder,” she said. Last week, Christine Lagarde, managing director of the International Monetary Fund, said a vote to leave the EU at next month’s referendum could cause a house price and stock market crash. “We have looked at all the scenarios. We have done our homework and we haven’t found anything positive to say about a Brexit vote,” she said. Estate agents also claimed thousands of pounds could be wiped off the value of UK houses if Britain votes to leave the EU. Prices in London could fall by as much as £7,500, while homeowners in the rest of the country could lose £2,300, the National Association of Estate Agents said. However, Moody’s suggested Brexit would be positive for cash-strapped first-time buyers who are currently priced out of the market. UK prices rose in March at their fastest monthly rate since 2004, the latest official figures showed, boosted over the month as buy-to-let investors rushed to complete purchases ahead of a stamp duty rise in April. House prices increased 2.5% over the month, taking the average price of a home to £291,820 according to the Office for National Statistics. Moody’s said London’s property market could be more affected by Brexit, and that landlords could struggle to pay mortgages because of falling rental demand. Trinkaus said: “A decline in rental demand could hit landlords’ ability to pay their mortgages on buy-to-let properties if London becomes less attractive to foreign nationals.” Moody’s also warned that self-employed people in Britain would be more at risk than employees from fluctuating pay in the event of Brexit, potentially affecting their ability to make mortgage repayments. The agency said that should a vote to leave the EU have a bigger negative impact on the UK economy than it is expecting, mortgage arrears would increase among self employed borrowers. “The highest risk would apply to those borrowers with additional risk characteristics such as poor payment history, high loan-to-value or interest-only features,” Moody’s said. It added that London had the highest concentration of self-employed people in the UK, at 17.3% in 2014. The number of self-employed swelled in Britain during the financial crisis, as many people who could not find permanent work or sufficient hours opted to work for themselves instead. Self-employment reached the highest level since records began 40 years ago, with the proportion of the total workforce self-employed rising to 15% in 2014 – or 4.6m people - compared with 13% in 2008, and 8.7% in 1975.
Moody's ratings agency has reported that houses would be more affordable for first-time buyers - who are currently priced out of the market - if the UK votes to leave the EU. The agency said that house prices would drop and rental inflation would slow following Brexit's impact on immigration. The IMF and estate agents have also said that a vote to leave the EU could result in a sharp drop in house prices. Of course, on the downside for homeowners, that means prices in London could fall by as much as £7,500 while homeowners in the rest of the country could lose £2,300, according to the National Association of Estate Agents.