Brexit: What does it mean for Preston's property rental market?
Matt Eastham is director of Easthams & Co; a leading lettings and corporate relocation company based in Preston. Here he talks about the possible implications the Brexit result could have on the lettings industry.
Following the recent referendum results, there has been plenty in the way of discussion about how Brexit will impact landlords and local rental markets.
For landlords in Preston, there is undoubtedly apprehension about how this vote will affect them, and while any changes won’t be imminent, there is sure to be some confusion about what these changes will entail when passed. Based on initial industry responses, we take a look at possible changes that could affect landlords and the Preston rental market…
Construction on affordable housing could slow
With things like interest rates, lending practices and buyer confidence all in a state of flux, many developers may well press pause on future developments. This could mean that would-be buyers are once again relegated to renting, which spells good news for landlords with available properties.
Rents will be unaffected – but demand might be
According to the Association of Residential Letting Agents, almost half of their agents expect the number of prospective tenants to fall. This is due to the fact that stricter border control will result in less immigration, which in turn means fewer immigrants arriving and seeking rented accommodation. However, rental rates are not expected to dip, meaning landlords with occupied properties need not anticipate any changes to their cash flow.
Renters could leave property hotspots
Major UK cities are expected to suffer job losses and economic instability, this could well lead to people swapping the expensive city for more affordable accommodation in areas such as Preston, from which employment hubs of Manchester and Liverpool are equally and easily commutable.
Property prices could fall
As uncertainty grips the market, it’s suspected that sale prices will dip in the wake of Brexit. Transactions are also expected to stall, both of which are bad news for investors looking to offload any rental properties. For landlords looking to acquire more however, there is less competition and the possibility of getting more for your money to look forward to.
The Right to Rent Act could change
While private landlords are legally obligated to check the status of their tenants, when Britain exits and regains full control immigration and border control, this burden could be lifted from their shoulders. As failing to conduct these checks currently carries a fine of up to £3,000, overturning this legislation would no doubt be a move that landlords welcome with open arms.
Buy-to-let mortgages could be affected
Banks are sure to tighten lending criteria in the wake of the referendum results, and interest rates are expected to rise. This could impact not only a landlord’s ability to qualify for a buy-to-let mortgage, but also their willingness to apply for one.
EPCs could be no more
EU Legislation has mandated the use of Energy Performance Certificates, which has meant that landlords have to provide these to tenants prior to their moving into a property. If EPCs are no longer a legal requirement – as many expect will be the case – this will save landlords a great deal of bureaucracy, time and expense.
Easthams & Co has been based in Preston since 1984 and were the first specialist residential property management company in the area.