15th July 2016
Nearly two thirds (65%) of landlords are unsure or concerned about a negative impact on the private rental sector of the vote to leave the European Union.
In the wake of the UK’s decision to leave the EU, 40% of landlords believe that the result will have a negative effect on the private rental sector, with a quarter (25%) saying they are uncertain what the impact will be.
Of those landlords who fear Brexit will result in a downturn in their sector, over four in 10 (42%) have a Buy-To-Let (BTL) mortgage – pointing to the potential economic worries associated with leaving the EU.
Nevertheless, private landlords are bullish about their own fate. Nearly half (43%) of landlords say the UK’s EU exit will have no impact on their own lettings business. However, the majority (53%) of those landlords do not have a BTL mortgage.
Mark Long, director at BDRC Continental, says: “These early findings in the days immediately following the UK’s decision to leave the EU paint an interesting but mixed picture for private landlords. Attitudes and future intentions vary widely, with an underlying current that the only certainty is that there is no certainty.
“Some of the key factors that will determine how private landlords weather the storm include their exposure to EU residents and the extent to which they have strong underlying profitability across their lettings portfolios to adapt to the evolving financial landscape. The next quarterly landlord’s panel results in early August will provide further insights on the sentiment among the UK’s private landlords on whom much of the population relies for good quality housing.”
BDRC have also gathered some quotes from landlords assessing the situation below.
“It’s difficult to plan to expand the business in a period of economic turmoil and uncertainty – not knowing how or what changes will occur with costs of borrowing, taxation, availability of labour in the building trades etc.”
“Fewer EU residents means less tenants overall, so there will be more empty properties and it will take longer to find new tenants. I also think interest rates will rise so mortgage costs will increase.”
“My rental tenants are EU migrants, so depending on the outcome of the agreement negotiated with the EU, I could lose out on excellent tenants. I anticipate house prices decreasing which may put my rental into negative equity.”
“The EU referendum has affected the financial markets. If this continues, it will affect interest rates, which for those buying on a mortgage is scary. I am fortunate as I have no mortgage, but unstable financial markets affect the whole economy.”
“People will still need somewhere to live. Demand will not change.”
“Reduced immigration will reduce the demand for rental properties, although I continue to expect demand to outstrip supply which allows the sector to be healthy.”