With the country voting to leave the EU last week a lot of people have turned their attention to the property market, and just how Brexit might impact buying and renting. It’s still too early to make any firm statements, but some analysts are starting to make some predictions about the rental market and what we should expect over the coming years. An opinion that seems fairly common at the moment is that rental supply will remain at similar levels as Britain prepares for life outside the EU.
A report has found that two thirds of letting agents are not expecting supply, demand or rental costs to change that much in the immediate aftermath of Brexit. In the future demand may start to fall, as prospective international tenants choose to go elsewhere, but for the most part prices should stay around the same levels we’re seeing today. Elsewhere a quarter of the agents surveyed say that Brexit will cause upward pressure on rental costs, as landlords will be looking for a greater return on their investments.
Buy-to-let mortgages have been getting increasingly difficult for landlords to obtain, with lenders continuing to reduce the amount that they are prepared to lend in relation to rental income. However there is some hope that Brexit may actually help the sector, as house prices could fall faster than rent and landlords’ yields would rise. That wouldn’t help their existing properties but it could provide some much-needed relief if they wanted to add to their portfolio.
Other industry experts say that housebuilding levels will take a hit, and that some property deals that were in the pipeline are now being cancelled following Brexit. If this is the case and fewer homes are built around the country then it could force landlords to continue with their current portfolio in the short term. However, overseas buyers could be tempted into the market thanks to a weaker pound, and anyone who trades in US dollars has much value to gain from capitalising on the exchange rate.
As things stand it’s too early to say for definite what kind of impact Brexit will have on property, but it will be a very interesting time for the sector. In the meantime if you’re a landlord or letting agent in need of inventory services then make sure you get in touch with No Letting Go today.
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