What does Brexit mean for Rent Levels?
Well, I don’t think Brexit is at all positive for tenants. Indeed, I think rents will likely increase as a result of the vote to leave the EU.
Here are the factors as I see them….
First, nervousness among potential home buyers will have increased. Many people will worry that house prices will be more likely to fall as a result of the vote. This has meant that people will be less likely to buy houses and flats, putting off purchasing for now. And so this will mean a lot of them will continue to rent instead, putting increased pressure on rent levels.
Second, though there was some increased supply of properties available for rent coming through early in the year (as landlords rushed to beat the Stamp Duty Land Tax hike deadline of April 6th), the signs are that new supply has really collapsed since then. The increased taxes that landlords now have to pay on SDLT and more especially on their profits, (due to the removal of loan interest reduction at other than basic rate), is leading to a fall in supply of available properties to rent as some landlords sell up and new landlords stay on the side lines.
Third, I don’t think there will be any significant reduction in the level of demand for rental accommodation as a result of reduced migration, because I don’t think migration will reduce much, if at all. It seems to me that, at least in the medium term, the EU will not let go of the sacred cow of free movement of labour, and if the UK is to get any benefit from trading with the EU, we will have to accept that principal. In the very long term, the EU may one day accept that free movement should perhaps be restricted to countries with similar levels of income, in a kind of “two-tier EU”, but I think that will be years away, if indeed it ever happens.
Getting The Rented Property You Want in the Brexit World
But tenants in the private rented sector can do a lot to ensure that, in this world of even higher demand for rented accommodation, they are near the front of the queue, and are able to persuade landlords to let to them instead of other candidates. There is much they can do to assist this process. My strong suggestion is that they get my book – which contains many helpful tips and guidance. Click here to buy “Tenants’ Guide to Successful Renting”.
You may also like to listen to Tessa Shepperson’s interview with me about the book.
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