This week, we looked at how house prices could be impacted by Brexit, with house prices in the UK currently rising at the slowest annual rate since 2012 and prices falling in some areas. But how could the private rental market be impacted by Brexit?
In 2017, there were 4.5 million households in the private rented sector in the UK, according to the ONS. Around 35% of those renting privately were from the 25-34-year-old age group, with younger people more likely to rent privately than older households.
Data shows that in the decade to 2017, those buying houses with a mortgage has fallen and the number of people renting privately has increased, up 7% since 2007.
But how is Brexit set to impact the rental market? Insurance group Alan Boswell recently surveyed UK landlords to find out their views of the post-Brexit private rental market.
The data collected displayed a mixed outlook amongst landlords across the UK, but mainly negative outlooks on how they feel Brexit would impact the market. Greater London, and Perth and Kinross had the most negative outlooks of the private rental market, whereas landlords in Devon held by far the most positive view of the market after Brexit.
The data also showed that the vast majority of landlords were not considering changing their rental prices due to Brexit – news that is good for renters. 3% of those surveyed said they were considering lowering rental rates due to Brexit, with 6% considering raising them.
While this may be good news for renters, Brexit uncertainty is not great for landlords – according to the survey, 32% of London landlords have thought about selling their rental property due to Brexit.
Heath Alexander-Bew, Director of Personal Lines at Alan Boswell said;
“Recently the political situation has obviously caused uncertainty, which can be troubling for any business. This is perhaps why we are seeing the freezing in rental rates – good news for renters. We’ve seen a rise in rent guarantee sales, insurance for landlords that pays rent should their tenants not meet rental payments another small indication of the impact our political situation is having.”
Earlier this year, it was reported that rents in some areas of the UK had fallen for the first time in a decade. But it may not be all good news for renters – some parts of the UK will likely see more of an impact than others on the rental market after Brexit. It has been suggested that some landlords may raise rents as a ‘contingency’ in case of large impacts from Brexit.
The rental market could also be impacted after Brexit if the UK becomes a less attractive place to work and study. Around 10% of private rental tenants in the UK are EU nationals, and this number may fall, potentially leaving some premises unoccupied depending on immigration and visa rules after Brexit.
Brexit has been and continues to cause uncertainty in many areas, and the private rental market is no different. It looks like it could be good news for renters for now, but landlords may expect to face some struggles as a result of the UK’s departure from the European Union.