While Brexit is likely to cause ripples - at the very least - in the UK's housing market, the rental market is expected to remain pretty steady. The slow pace at which any change to the UK’s status will occur is, of course a factor in this assessment while little expected change in demand is another.
As volatility continues to haunt the global stock markets, albeit at a softer pace than that which was seen in the first two-day sell-off, the outlook for the UK’s property market remains mixed but relatively calm. For the UK’s rental market, the calm part of that statement is what they will likely be hoping for. And, according to some, it’s probably what they will get.
The Associated of Rental Letting Agents (ARLA) and the National Association of Estate Agents issued a joint press release the day after the UK surprisingly voted for Brexit. In it, they said uncertainty across a whole range of housing related issues was to be expected.
“In the short term we believe that both prices, and rents, will remain stable, but we cannot be certain about the next quarter as political instability, and market unrest, could lead through into prices in the housing market,” said ARLA’s managing director David Cox and managing director of the NAEA Mark Hayward. “We believe that the UK housing market is resilient, as is the supply chain that drives it. But as we indicated in our Brexit report last month, the bigger impact may well be in the skills necessary to drive UK housing development, and this is now a major concern for UK buyers and renters.”
A cautious and rounded outlook, as expected from the managers of two of the UK’s property related groups.
Landlords, meanwhile, said in the run-up to the European (EU) referendum that they didn’t expect much impact. ARLA’s May private rental sector (PRS) report showed that almost 80% of survey respondents didn’t anticipate an immediate rise in rents if there were a Brexit.
And other opinions are also pretty sanguine, for both renters and landlords.
For renters, the future could bring a little less competition for the properties that are available for rent on the market. But, while there’s minimal expectation of a rise in rent level as a Brexit response, nor is there any likelihood that rents will fall amid that drop in demand.
For landlords, the UK’s biggest landlord, Fergus Wilson told the Daily Telegraph in an interview that he expected landlords could soon find there were “better tenants” available to rent their property.
“I don't think Brexit will have much effect on buy-to-let house prices because they're mainly cheaper properties worth less than £500,000 outside of London, so the prices don't have as far to fall,” said Fergus Wilson, who is currently in the process of selling his 900 buy-to-let property portfolio. “I think the points system being designed by Boris Johnson and Michael Gove will help landlords because it will help us get better quality tenants. They won't send the ones that are already here home, and if they only let skilled ones in that means better tenants for us,” Mr. Wilson said.
Of course, at this point everything is subjective as the future remains uncertain. As things stand (June 29, 2016), the UK remains part of the EU and there are no immediate plans for that to change until the Government has some sort of plant to move forward and invoke the wishes of the British public. Until real change is underway – which is likely to take years – the outlook for the UK’s property and rental market looks set to remain cautiously positive.