London tenants could be £1,806 better off since the UK’s
vote to leave the EU in June 2016, according to the latest Rental Index from
Landbay, which is powered by MIAC.
Using a conservative projection, rent price growth in London
is now 2.84% lower than expected back in June 2016, but this could be as high
as 4.15%. This higher estimate would leave London tenants with an extra £1,806,
due to subdued rent prices, or £1,218 for the mid-point calculation.
The capital’s property market, which has arguably suffered
disproportionately from uncertainty since the EU referendum, saw average rent
price growth drop from 1.26% in June 2016 to a low of -0.33% in June 2017,
before starting a slow recovery in February 2018 (+0.05%), up to 0.58% in
December last year.
The rest of the UK has largely stayed in line with
expectations for growth, with the decline in rent price inflation being
confined to London.
The average UK rent price rose by 0.96% in the year to
December, Landbay reports. Nationally, growth continues to be weighed down by
slower inflation in London on otherwise resilient increases in the rest of the
UK (1.16% excluding the capital).
Rent prices in Wales (1.57%) and Scotland (1.48%) were
growing more than 55% faster than the rest of the UK, and almost twice the rate
of growth for Northern Ireland (0.75%).
On a regional level, rent price growth in the East Midlands
(2.19%), West Midlands (1.48%), and Yorkshire and the Humber (1.40%) continues
to lead the way, while growth in the North East (0.01%) continues its downward
trend towards falling rents.
John Goodall, the CEO and Founder of Landbay, says: “It’s hard to ignore the impact that the vote
to leave the EU has had on property market in London. While tenants are better
off, without necessarily realising it, uncertainty in the market has caused a
conundrum for landlords.
“Many landlords will have been looking to
offset the Government’s punitive tax regime by raising rents, however, the
uncertainty surrounding Brexit has forced the vast majority to forfeit this to
maintain a steady income.”
He believes: “Employment and immigration are
the two main concerns for the housing market when considering Brexit. While
nobody is any clearer about Britain’s future relationship with the EU, it’s
clear the impact of a no-deal Brexit would be significant for the UK economy
and property market.”
The findings arrive as MPs prepare to vote on
Theresa May’s Brexit deal today.
Another study claims that UK rents are expected to increase by an average of 11.4% by 2024.