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Will Brexit affect property rentals

Will Brexit affect property rentals

Around a fifth of the UK population is now renting from a private landlord and tenant numbers are predicted to continue to increase. This burgeoning market is one that, so far, doesn't seem to have been that affected by the political game playing and confusion that has surrounded Brexit negotiations. However, the sales market in the UK has taken a hit and so is it only a matter of time before Brexit has a similar impact on property rentals?

Last year rents fell for the first time in a decade

That's according to the latest data, which revealed that even the profitable London market has been on the slide. Average rents in London dropped by around £30 a month in 2018. Other parts of the country were affected much more significantly - for example in Yorkshire and Humber the fall in rent was almost 4%. However, despite these latest figures there is still a lot of positivity surrounding the UK's rental market. In 2018, the Royal Institution of Chartered Surveyors indicated that it predicted that rents would continue to rise over the next 15 years. Two key factors were involved in this - firstly, the fact that the supply of rental homes is not increasing and secondly the reality that the number of people who want to rent is still going up. Rising house prices have made it almost completely unaffordable for many people to even consider buying somewhere to live so Generation Rent will ensure that lettings remains profitable.

How will landlords and tenants be affected?

  • Landlords. Currently, the situation looks bright for existing landlords. Although confusion remains over Brexit the reality is that the market for rentals in the UK is healthy. Demand seems to be increasing by the year and, as a result of a lack of properties to rent, it will be possible for rents to rise. The predictions from the Royal Institution of Chartered Surveyors put this increase at 15% over 15 years. Fears of a mass exodus of EU tenants have just not happened.
  • Tenants. The main factors involved for tenants are the location of the rental property and also the landlord. Rents are likely to increase more in areas where rental stocks are dwindling and there are certainly some landlords who will be willing to hike up rents due to real or imagined "Brexit costs."

The takeaway message when it comes to Brexit and the rental market is that leaving the EU is not one of the factors that is going to have the biggest impact on how the sector changes. According to Housing market analyst Henry Pryor "Brexit is a distraction and not something that is going to have a direct and measurable impact on the lettings market." However, with the details of a Brexit deal still uncertain there is no telling what might change in the months to come.

We are letting agents in Hackney and can help you to rent your property well no matter what the political and economic conditions may be.

31 October 2019Written by Andrew Blythe

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