The euro could be a mixed blessing for UK property, a joint seminar of the European Real Estate Society and the Society of Property researchers was told. Joining Economic and Monetary Union would bring short-term benefits to property owners, but in the longer term it would lead to increased volatility in demand for property.
The seminar heard that if the Euro were adopted tomorrow, it would be extremely beneficial for UK investors. By European standards the UK property market is relatively transparent, liquid and landlord-friendly. European investors would pile in to the UK market and yields would fall as a result.
And UK investors seeking to buy property elsewhere in Europe would benefit from decreased currency risk. However, the risks of investing in high-yielding property markets may well be underlined by the â€œone size fits allâ€ interest rate policy within the Eurozone. This could mean that instead of stabilising demand for property using interest rates, the Eurozone policy could create more volatility.