Although many UK landlords feel uncertain or worried about the Brexit vote’s possible negative impact on the private rental sector, almost half believe that the outcome will not affect their own lettings business.
A post-EU referendum survey by BDRC Continental reveals how landlords felt in the immediate aftermath of the UK’s decision to leave the EU.
The study found that despite two-thirds of UK landlords feeling uncertain or worried about a negative impact on the private rental sector, they remain confident about their own investments.
According to the BDRC Continental report, 65% of landlords are unsure or concerned about a negative impact on the private rental sector following the vote. Worryingly, 40% of landlords believe that the result will have a negative effect on the sector, while a quarter (25%) are unsure what the impact will be.
UK Landlords Remain Confident Following Brexit Vote
One landlord commented: “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.”
Of those landlords that fear the Brexit will result in a downturn in the private rental sector, over four in ten (42%) have a buy-to-let mortgage – highlighting the potential financial worries associated with leaving the EU.
Other landlords stated: “Less 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.”
Despite this, almost half (43%) of UK landlords believe the Brexit will have no impact on their lettings business. However, the majority (53%) of those landlords do not have a buy-to-let mortgage.”
Some landlords remain positive: “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.”
The Director of BDRC Continental, Mark Long, comments on the findings: “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.”
Are you confident in the future of the private rental sector post-Brexit?