Brexit: A summary
Despite some experts predicting Brexit would hit the property market hard, a month after the historic referendum result there has yet to be a notable impact on the sector.
While a period of uncertainty is perhaps to be expected, industry studies, professional research and first-hand findings from our staff across the country show the British public’s vote to leave the European Union (EU) simply has not had a negative effect on the property market.
In fact, the early evidence indicates there has actually been an upturn in activity in some areas as people who were holding back on their next move or buy-to-let investment until after the referendum are now free to push ahead with their plans.
Business as usual
The UK’s property market is renowned for its resilience and buoyancy. Even after the worldwide economic crash of 2008, it took just 18 months for the market to return to growth.
It seems it is responding in similar fashion following the Brexit vote, with our branches reporting it is business as usual.
New research also reveals:
• A 50 per cent increase in the number of viewings requested via leaders.co.uk in the week after Brexit in comparison with the week before
• A two per cent rise in rental enquiries via Rightmove in the two weeks after the referendum versus the same two weeks in 2015
• An 18 per cent surge in the number of property details viewed online at leaders.co.uk in the week after the referendum compared with the previous week
• Some 65 per cent of letting agents believe the supply of rental properties will remain stable, according to ARLA
• Less than 15 per cent of landlords are planning to sell a rental property in the next two to five years, according to Rentify
Landlords and the legislation that matters
There is a common misconception that our lettings legislation has been derived from EU law but that is not the case. Most legislation affecting landlords has nothing to do with Europe and will therefore not change as a result of Brexit.
However, there are some areas of EU legislation that do impact on the PRS, such as Energy Performance of Building Regulations, Consumer Protection from Unfair Trading Regulations and heat network regulations. It remains to be seen whether parliament will pass an act to confirm that all current regulations continue as before or if new legislation will be drawn up.
One likely change, however, is that another Immigration Act will be introduced to take into consideration the border controls left as a result of leaving the EU. Various documents will need to be checked by landlords or their agents as the definitions of permanent and time-limited rights to rent will need to be change.
During this period of change it will be more important than ever for landlords to work with a professional letting agents to ensure they remain compliant at all times.
What do we expect in the future?
Leaving the EU is unknown territory and the reality is that nobody can say for sure what lies in store. But a number of our experts have combined to draw several likely conclusions:
• With a shortage of homes and high demand, the property market will remain strong
• EU regulations relating to the mortgage sector will no longer apply, allowing UK banks the option of lending more freely
• In the event of house prices falling, rents would decrease at a far slower pace, helping to increase overall yields for landlords
• House builders and developers could be weakened on the stock market, making it harder for the government to meet house building targets and pushing house prices and rents up as supply continues to lag behind demand
• Nothing will change quickly - it will take at least two years for the UK to leave the EU and it could be many more before the precise impact is known, so the property market will not face any sudden shocks