House price growth in London is beginning to slow after three years of double digit rises. Since the credit crunch in 2008, the property market in the UK has grown consistently. Driven by the incentivised government lending policies such as the Help to Buy Scheme, people have managed to borrow cheaply and purchase property. This has been a real driving factor for the property market and has helped increase prices year on year. The average price of a London home has almost doubled in the last eight years, leaving questions over the challenge of providing affordable housing and also the added pressures of sustainability. The government have tried to manage the market by increasing tax levies via stamp duty on the most expensive properties and by making it more difficult for landlords to rent. Yet such schemes have only had a minimal cooling impact thus far. Competition is just too fierce between buyers for each limited available property. This has driven the prices up and offset the governments retractionary policies and has caused prices to soar.

However, there is a feeling within the market that things are changing and certainly on the ground we are hearing that the market is much more difficult. The recent sellers’ market could be changing into a buyers’ market. Is the imminent threat of EU exit stirring up economic uncertainty and frightening investment in the real estate market, dampening demand or is this a longer term issue? It is known that almost 50% of the central London property market investment is foreign based. Has the once politically and economically reliable investment placement in London become uncertain and too costly?

Certainly the IMF argue vehemently that this is the case. Christine Lagarde was recently quoted saying that the IMF “have looked at all the scenarios and have done our homework and haven’t found anything positive to say about a Brexit vote,”. She added that “There isn’t a country I have visited in the last six months that hasn’t asked me what we think the impact of Brexit will be.”

Following in the footsteps of the International Monetary Fund, the Chancellor George Osborne, Bank of England governor Mark Carney and the ratings agency Fitch, stated in May that a Brexit would wipe value off UK housing.

One study, commissioned by the National Association of Estate Agents and carried out by the Centre for Economics and Business Research, estimates the total value of UK housing could fall by as much as £26.5bn by 2018. “Homeowners in London could lose as much as £7,500, while homes elsewhere in the UK could lose £2,300,” notes the BBC.

The research points to falling demand from overseas buyers – and also speculates that reduced demand for rental properties could prompt private landlords to sell up.

Elsewhere, the ratings agency Moody’s published a note that similarly predicted that house prices would fall in the event of a victory for the Leave campaign. Its rival Fitch had previously said that valuations could decline by as much as 25 per cent.

Historically, unsurprisingly, similar uncertainties have affected house pricing. The analysis showed that on average, prices 12 months before an election are 4.9pc lower, while 12 months afterwards they are 8.6pc higher. With the UK’s record high current account deficit and reliance on external funding, this could place the economy and housing market in a perilous position. The IMF believe that this referendum could cause such adverse market reactions that it could contract economic activity to a level that it places the UK economy back into recession.

These foreboding statements have good grounding one example being the last few tumultuous months which have seen the sterling fall by 8% and wages growth slow. Property businesses who also fear change to the status quo have offset their risk pending the outcome of the referendum. The three leading investment groups have switched their property funds from the usual ‘offer’ price to the lower ‘bid’ or ‘mid’ price. This reduces the value of over £13 billion held in the funds by between 5% and 6.25%, effectively putting investors at the lower end of the ‘spread’ between the prices at which investors normally buy and sell their funds. Evidence shows that in recent months withdrawals from property funds have increased in response to the government’s hike in stamp duty on investment properties and to a cooling in interest from foreign investors ahead of the 23 June vote on the UK’s EU membership. Will this all be reversed if UK votes to remain in? Mr Grainger, of JLL, said last week that even if there is an in vote, his company anticipates UK real estate investment volumes “could still fall in 2016 due to uncertainty pre-referendum”.

Whatever the vote is, it is clear that the referendum is causing investment delays and uncertainty in the property market. Will it cause a decline in pricing and push the economy back into recession? This remains to be seen. What is interesting is that a vote to stay in may push UK economic growth back in line with potential growth, restore credibility in the UK and push the housing market prices ever higher meaning that this period of uncertainty was a short term opportunity for savvy investors.