The future is looking increasingly uncertain for the UK, and a prolonged period of uncertainty isn’t good for any industry. We’ve answered some of our Landlords’ questions about what Brexit means for them.
Currently, we don’t know what the government that will guide us through the Brexit will look like, so predicting future policies and legislation is difficult.
However, financial experts have predicted a period of economic downturn, which could result in a fall in property prices in the short term.
For those landlords who are looking to sell their properties, this could result in a drop in the amount of capital gain they generate. If landlords are looking to expand their portfolios, a small drop could provide the perfect opportunity to grow.
If the economy looks to be entering a recession, the Bank of England will introduce a buffer in the form of a rise in interest rates, making buy-to-let mortgages considerably more expensive. This, coupled with the government clampdown on these mortgages, will make it very difficult for a new landlord to get started.
EU citizens make up a large portion of the rental market in large cities. Post-referendum, we are expecting to see a drop in the number of European citizens living in the UK, resulting in quite a few empty properties. However, we will be watching the Brexit negotiations with interest, as it is possible that Britain will still have to allow free movement across its borders.
We will always urge our landlords to prepare for the worst-case scenario. None of the above is for certain, but it is always better to be pleasantly surprised than have a nasty shock.