A row of estate agent boards in London | Oli Scarff/Getty Brussels Sketch How the UK’s housing crisis builds a case for Brexit If British voters link their housing difficulties with migration, the In campaign will struggle.

In Brussels, there is a temptation to imagine that the outcome of the British referendum on whether to remain in the European Union will depend on what is decided next month in Brussels.

The temptation, though natural enough, is best resisted, even if it suits both David Cameron and the leaders of the EU institutions to pretend that their current ritual of renegotiation amounts to something.

Jean-Claude Juncker, the president of the European Commission, has declared himself confident that a deal will be done, perhaps as early as next month. Donald Tusk says the issue must be rapidly addressed. And Downing Street is now briefing that the deal will be better than Cameron had dared hoped for.

Be that as it may, no one should imagine that British citizens are so well acquainted with the minutiae of EU policy that they will make an informed judgment on the deal that Cameron reaches. Successive generations of British politicians have done their best to keep their voters in a state of advanced ignorance and prejudice. There is no reason to suppose that the level of knowledge will be raised significantly during a brief referendum campaign.

Those campaigning for Britain to leave the EU are already accusing Cameron and his political strategist, George Osborne, who moonlights as finance minister, of resorting to “Project Fear” — a reworking, say their detractors, of the scare tactics used to win the referendum on Scottish independence (though that particular victory was immediately thrown away).

According to this reading, the referendum campaign in favor of Britain remaining in the EU will be a thinly disguised reworking of Hilaire Belloc’s cautionary verse about Jim, who was eaten by a lion: “Always keep a-hold of Nurse / For fear of finding something worse.” Cameron and his allies in the business world will urge the U.K. to stay in the EU, because an exit would be a step into the unknown, where there be not just lions, but probably also dragons.

If this does amount to a political strategy, its weakness, it seems to me, is not just its negativity, but also its assumption that there is a monopoly on fear. In contrast to the debate about whether to remain a United Kingdom, the British people have no settled view of the European Union. What the EU might be, or might become, is just as scary to them as what life might be like if Britain were outside the EU.

Whatever Juncker and Cameron might want, I think it much more likely that voting in the referendum will be a reflection of the balance of the electorate’s fears and discontents.

And, for most voters, what goes into making that assessment (consciously or unconsciously) will not be the deal struck on the U.K.’s relations with the EU, but less esoteric issues, including jobs, health care, schools and housing. Those are the issues that traditionally determine whether voters feel good about themselves and their prospects.

What I think should worry those in Brussels who desperately want the U.K. to stay part of the EU is its housing market. (More properly, that should be markets in the plural, since there are various inter-related markets, including those for owner-occupiers, renters, and social housing — both public and private — plus the markets for mortgages and insurance.)

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In broad terms, there is a shortage of good quality affordable housing, particularly in the southern half of England. Demand exceeds supply. In the rental markets that means property is often of poor quality and is offered on terms that do not give tenants security of tenure. Public housing is very variable in quality as well as supply. Right-to-buy legislation was pushed through by Margaret Thatcher in the 1980s. While it allowed council tenants to buy local authority housing stock, it also had the predictable effect of depleting the quality and quantity of the councils’ stock.

During the credit boom, persistently high property prices when combined with a shortage of decent rental property forced a lot of people into greater indebtedness than they could afford. As Mark Carney, the governor of the Bank of England, reported on Tuesday, progress in reducing the dangerous levels of household debt is still painfully slow.

However, the unwinding of the worst effects of the credit crunch is only a small part of a housing crisis that is of far longer standing. For decades, homebuilding has failed to keep pace with demand. The causes were various: ideological aversion to public investment (in the case of some Conservative governments), lack of funds, lack of appropriate land, plus planning laws and regulations that held housebuilding in check.

I can recall covering, back in 1997, an intelligent report from the Council for the Protection of Rural England on how to create more and better homes in towns and cities, which, among other things, highlighted how family breakdown was amplifying the demand for family-sized homes. A few years before that, the city of Bath, where I was then working as a reporter, was grappling with the difficulty of how to recover homes above shops — pricing in the commercial property market made it unattractive to rent out apartments above shops in city centers. Building new homes, or putting unused homes back onto the market, is complicated and multifaceted. Dismantling such obstacles is no easy task.

Since then, the disparities in house prices across the country have grown worse, limiting people’s opportunity to pursue work. In turn, the barriers in the housing market have amplified disparities in the standards of health care and education — the so-called postcode lottery (and, yes, this is a country in which people move to get their children into better schools).

My guess is that housing is the kind of issue that will matter to that referendum on Brexit, whenever it comes.

What has been fascinating over recent years is to see successive governments attempting housing reform, but failing to make an impact. Cameron and Osborne are clearly aware that housing is an important issue and have sustained some political injuries in their forays into the territory. The introduction in 2012 of what was derided as “a bedroom tax” was a politically ham-fisted attempt to induce council and housing association tenants to downsize — by reducing their housing benefit where they were deemed to be occupying more social housing space than they needed. The problem of “under-occupancy” does exist but the tax has not reduced it.

A more characteristically market-oriented measure was the introduction in the late 1980s of provisions for buy-to-let mortgages, which were meant to encourage the development of the U.K.’s under-developed rental market. But the rapid growth of such lending in the last 15 years has been blamed for contributing to house-price inflation. Not only was the credit market overheating but buy-to-let was also making it harder for would-be owner-occupiers to find their first homes. Perversely, in London investors were apparently using such loans to buy properties in order to leave them empty, awaiting a further increase in property prices. The problem was so acute that as part of his statement on public spending last November, Osborne cracked down on buy-to-let lending, cutting the tax allowances and increasing the stamp duty on such loans.

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But housing is still very much a live political issue. A housing bill was published in October and is still before parliament. Just last week Cameron announced plans to demolish the worst of the post-1945 housing estates that have blighted many cities. (His political opponents dispute the overblown rhetoric and point out that many Labour-controlled councils embarked on such projects long ago.)

What I take from this is that, despite their earlier missteps, Cameron and Osborne are acutely aware that the housing market matters to their voters, both politically and economically.

But I put alongside their political concern the informed comment of the Joseph Rowntree Foundation, which has long been active in research on housing, poverty and related areas of social policy. It has been warning the government that it is wrong to focus too narrowly on home ownership — and needs to do much more to improve the supply of stable affordable tenancies. (Just as Cameron is imprisoned by Thatcher’s ideological legacy on Europe, so he is also tied to the legacy of “right to buy.”)

The JRF verdict on the housing bill is that “there is still an urgent need for a much more ambitious plan to supply genuinely affordable homes for sale and rent.” More and more problems, it argues, emanate from the private rented sector.

There were some scary numbers in the JRF’s annual report on poverty and social exclusion. Two that caught my eye were:

“There are now 53,000 homeless households in the U.K., 13,000 more than five years ago. This growth is due to families being unable to find a suitable new home when they reach the end of their tenancies in the private rented sector."

“The proportion of people living in poverty who live in the private rented sector has nearly doubled over the last 10 years to 4.2 million.”

My guess is that housing is the kind of issue that will matter to that referendum on Brexit, whenever it comes. And while it is true that the socially excluded are less likely than the owner-occupiers to vote, there are whole swathes of potential voters — owner-occupiers as well as renters — whose experience of the property market may sway their vote on the referendum.

The reason may be painful to the Eurocrats of Brussels, but it cannot be avoided: It is what we have learnt to call dog-whistle politics. The Brexit referendum, when it comes, will feature calls for Britain to control its borders and assertions that there has been too much immigration. (The quibbling about Britain’s existing border controls and the merits and demerits of migration will go largely unheard.) What will matter will be whether voters are experiencing problems in the housing market (and, for related reasons, jobs, schools and health care) and are associating those problems with migration. If they are, then those campaigning for the U.K. to remain in the EU will struggle.

It would be a brave prime minister who under these circumstances argued that what Britain needs is more of those fabled Polish builders. But, without them, Britain’s housing problems could shake the EU to its foundations.

Tim King writes POLITICO's Brussels Sketch column.