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Ten years after the UK voted to leave the EU, what did Brexit do to housing?
A decade ago, Britain voted by a 52% majority to leave the European Union. Caroline Thorpe looks back through the archives and speaks to sector figures about how a decade of Brexit has impacted the world of housing
A decade ago, Britain voted by a 52% majority to leave the European Union. Caroline Thorpe looks back through the archives and speaks to sector figures about how a decade of Brexit has impacted the world of housing #UKhousing“An unmitigated disaster.” That is how one housing association chief executive puts it, when asked how Brexit has affected the social housing sector.
Or perhaps some readers will reach for the words of rapper Dave, when he addressed former prime minister David Cameron on his 2017 track Question Time: “you f**ked us, resigned, then sneaked out the firing line.”
Others may not be quite so blunt, but one thing is certain: in June 2016, the UK voted to leave the European Union, and the aftermath has left the country in turmoil.
Ardent Leavers and Remainers alike found themselves scrambling to keep pace, as bitter, turbulent and years-long Brexit negotiations took place, until the eventual exit from the EU in January 2020.
As prime ministers came and went, negotiations stalled and the grim prospect of a no-deal Brexit waxed and waned, uncertainty ruled and the UK housing sector grappled with the potential implications (see timeline below).
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That the consequences of leaving the EU would be wide-ranging – affecting everything from finance, skills and recruitment to development and community cohesion – was clear. The precise nature of those consequences was anything but.
Today, polling by YouGov suggests that 55% of Britons support rejoining the EU, a prospect some governing Labour politicians have now raised openly. So, a decade on from the vote, what is now known about Brexit’s impact on the housing sector?
Development downturn
“No one can show me an actual tangible benefit of Brexit,” says Seamus Leheny, chief executive of the Northern Ireland Federation of Housing Associations (NIFHA). “When I speak to [NIFHA] members, it’s very difficult for them now.”
Perhaps the most noticeable impacts have been on workforce capacity and the cost and availability of building materials, curtailing new housing development and pushing up maintenance costs. “On labour shortages and inflationary material costs, we can absolutely pinpoint that to Brexit,” Mr Leheny says.
Meanwhile, he fears that the UK government will not step in to replace the EU funding programmes for housebuilding, from which Northern Irish social landlords have also benefitted.
“The last round of Peaceplus funding is available this year, and NIFHA are going to get just over €3m (£2.6m) for a housing-led cross-border integration initiative,” he says. “That will be the last round of [EU] funding because of Brexit.”
By contrast, NIFHA received €1.09m (£941,000) for the period 2018-2022.
Meanwhile in England, Gavin Smart, chief executive of the Chartered Institute of Housing (CIH), also reflects on the impact on housebuilding. Back in 2016, Mr Smart was deputy chief executive of the CIH, so the news of the Leave vote instantly had him concerned about the repercussions for the sector.
“Housing depends on long-term investment, stable supply chains and a skilled workforce,” he says. “So such a significant change inevitably raised questions about costs, labour availability, policy and regulatory frameworks, and economic confidence.”
Brexit reduced the UK construction workforce by more than 200,000 people, as EU nationals left the country post-Brexit, according to a report by PfP Thrive, which provides housing and construction training and apprenticeships, and the University of Cambridge.
Analysis by the UK Trade and Business Commission suggests that the cost of construction materials in the UK increased by around 60% between 2015 and 2022, compared to 35% in the EU.
While Brexit is just one of several difficulties to burden the housing sector in recent years – we’ve also had the Covid pandemic, building safety concerns and the inflationary effect of global conflicts – Mr Smart says “there is evidence that it has added pressure to an already strained system”.
Figures from the Office for Budget Responsibility show that, since 2016, the UK has seen its borrowing costs increase more than its European counterparts such as Germany, resulting in pricier financing for housing organisations.
“Tenants and residents tend to feel the effects indirectly,” he says. “Factors linked to Brexit – such as higher construction costs, workforce shortages and wider cost-of-living pressures – can make it more challenging for housing providers to deliver new homes and maintain existing ones, which in turn affects affordability and services for residents.”
Brexit’s impact
6-8%
UK GDP down
3-4%
Employment and productivity down
200,000+
Fewer workers in UK construction
Sources: National Bureau of Economic Research, Office for Budget Responsibility, PfP Thrive/University of Cambridge
In Northern Ireland, Mr Leheny says recruitment challenges are also making it much more difficult for housing associations to deliver care services.
Brexit has cut a key pipeline of care workers from EU countries, pushing up salaries, while the Supporting People government funding upon which associations draw to pay care workers has not kept pace.
“It’s costing housing associations money to deliver Supporting People. We’re having to subsidise the government funding for these services for vulnerable tenants. You could be spending that money on other things like community events and training, doing the nice things we would like to be able to do,” says Mr Leheny.
Fraying the fabric of communities
Like Mr Leheny, Rooftop Housing Group’s chief executive Boris Worrall says he has “yet to find a single person able to tell me a Brexit benefit”.
“It has been an unmitigated disaster,” he says, citing the now-familiar inflationary workforce and supply chain pressures, as well as noting that Britain’s GDP has fallen as a result of Brexit.
“It has played out exactly as feared. Brexit has been a key factor in accelerating inequality and deepening the structural challenges the UK faces – including a shortage of affordable housing and a rising and unsustainable welfare bill [because of falling GDP]… We have built fewer homes than we would have done [had we remained in the EU]. It is that simple.”
Mr Worrall concurs: “I was born in Berlin and finally got my dual nationality through last month. I can tell you that nations like the Germans miss us and can’t really understand why we committed such an act of self-harm.”
But for Mr Worrall, Brexit’s impacts go beyond bricks and mortar to fraying the fabric of communities themselves.
“One of the most horrific effects of Brexit [is] it released the demons of racism we all thought had been defeated in the 2000s, and normalised the othering of people who are not white,” he says.
“The impact on our communities has been corrosive and those who championed Brexit are responsible and need to own what they did to our society.”
Brexit timeline
Indeed, a 2018 survey of 160 UK local authority chief executives and leaders by New Local, a thinktank, found that 52.8% of respondents thought the decision to leave the EU was having a negative effect on community cohesion, while just 1.6% thought community cohesion had improved following the referendum vote.
The research highlighted rising hate crime and division in many areas, with council leaders and senior staff witnessing the rise of “far right, anti-immigration” views, “antisemitic graffiti” and “verbal abuse against non-Britons”.
Fuad Mahamed is chief executive of ACH, a non-profit social enterprise working to support refugees and migrants in the UK, including with their housing needs. He says the Brexit vote saw “my worst dreams come true”.
“Rioting and community tension have been on the rise since we left the EU, to the point it is a national crisis,” he says. “The assumption migrants are taking over resources from the home communities is not true but [people are] being led to believe so. We need to share facts.”
ACH has lost EU funding because of the UK’s decision to leave, including from the €10.9bn (£9.4bn) EU Asylum, Migration and Integration Fund, which aims to boost national capabilities and improve procedures for migration management.
“Brexit was the wrong answer to the right kind of questions about structural inequality and social disconnect”
ACH had drawn on this pot while the UK was in the EU, spending £1.5m over three years to support more than 500 UK-based refugee and migrant businesses, including a 21-year-old Afghan woman launching an online fashion and accessories line.
“We were doing lots of work with our EU partners, exchanging knowledge, visiting active projects in the EU. All have gone,” Mr Mahamed says.
NIFHA’s Mr Leheny is working hard to maintain pan-European ties post-Brexit. “It is important we don’t adopt a silo mentality on housing and continue to learn from colleagues across Europe,” he says.
“We have close relations with The Irish Council for Social Housing and a [housing] organisation in Belgium. More must be learned about best practice across Europe.”
He adds that among European housing organisations, “there is almost a concern for the UK housing sector because they don’t want us to be siloed. The message I’ve had is, ‘You’ve got to keep the lines of communication open, because there is a housing crisis across Europe and we’re stronger if we work together.’”
Adapting to a volatile world
But while UK housing organisations can take initiative in trying to maintain European relationships post-Brexit, they are also realistic about the environment they now find themselves operating in.
Landlords “have to set themselves to work in a world that is ever more volatile and uncertain”, says Michael Cameron, chief executive of the Scottish Housing Regulator.
“A well-run and well-governed landlord will be best placed to manage the risks and challenges that will come its way and to create the capacity – financial and organisational – to get through uncertain times,” he says.
“It is critically important that landlords continue to stress-test their business plans, and the best protection for a landlord in volatile times will be through effective governance.”
Brexit has forced organisations to shore up their own stability, says CIH’s Mr Smart: “It has encouraged more focus on domestic skills, training and supply chain resilience, which are positive long-term priorities.”
A likely Labour leadership contest is seeing renewed debate over the UK’s relationship with Europe and, as in the aftermath of the 2016 vote, the future shape of UK relations with Europe may once again be dogged by uncertainty.
Nevertheless, many in housing will hope it leads to a settlement that undoes some of the damage they feel Brexit has inflicted on their sector and those who depend on it.
“Brexit was the wrong answer to the right kind of questions about structural inequality and social disconnect,” Mr Worrall says.
“I knew that it would cause huge economic damage and that the impact would fall most heavily on those on lowest incomes, which of course are the customers and communities we tend to serve… It has played out exactly as I feared.”
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