Around half of letting agents claim that landlords remain nervous following the Brexit, with 12% reporting that rents have dropped over the past ten days.
In a report from the Association of Residential Letting Agents (ARLA), members say that last month’s EU referendum has not yet rocked the rental market, but uncertainty over the future of Britain’s role in Europe is making landlords nervous.
One in nine agents told ARLA that they have seen an immediate dip in rent prices following the Brexit result.
Sky-high rents, particularly in London and the South East, have been partly pushed upwards by recent arrivals from abroad, as well as a severe lack of available properties to rent.
The Managing Director of ARLA, David Cox, says that the lettings market has so far responded to Brexit in a calm manner, but warns that continued uncertainty could cause turbulence in the rental sector over the coming months.
He explains: “What we need is some certainty from the new Government that housing remains a priority, with the rental market playing a central role. For example, we want to avoid a situation where institutional investors start pulling away from the market, because ultimately, this will impact tenants by squeezing supply further and pushing up rents.
“Although we’ve seen some hesitation from landlords, this is relatively mild and it’s important they do not act in haste. Any inevitable longer-term changes will then be taken on board with greater ease.”
The report also found that almost 36% of ARLA agents have experienced either a reduction or the same number of prospective tenants looking for properties.
ARLA says that overall, both supply and demand for rental homes was up in June. Each member agent saw an average rise in prospective tenants of 12%, while the number of properties on agents’ books increased by an average of 3%.
“If one thing is clear following Brexit, it’s that supply and demand remains a real issue in the rental market,” adds Cox. “If supply continues to dwindle against growing demand, no matter what the eventual implications of Brexit are, renting will become more difficult and expensive for tenants.”
A separate report yesterday by the TaxPayers’ Alliance calls on the Government to abolish the 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers. It claims that the tax hike will drive up rents for tenants, as landlords pass on costs.
With uncertainty in the air and additional taxes for landlords, it could not be a better time to ensure that your rental income is protected. Avoid facing financial difficulty if your tenants struggle to pay the rent with Rent Guarantee Insurance. The Just Landlords policy will cover any rent arrears that you face, while also protecting your legal expenses if you are forced to evict your tenants.
Don’t miss out on rent!