If you think 2020 has been complicated, just wait until 2021: that’s the claim of a rental guarantor service which warns that Brexit will hit the lettings sector badly.
“The only thing certain about the UK rental market following Brexit, is uncertainty. Landlords face uncertain income from tenants, while tenants continue to face uncertain income due to the pandemic. Meanwhile, the number of working European tenants is likely to drop due to Brexit and Covid. All against a likely backdrop of falling property prices” warns Jeremy Robinson, group managing director of Housing Hand.
“The requirements for European tenants to travel, work and rent in the UK will change as a result of Brexit. Renting is likely to become more difficult, as the Right To Rent requirements will almost certainly change at some point in the not-too-distant future. Brexit’s effect on rental property, compounded by Covid, tax and legislation changes, means it is difficult to foresee many positives” it continues.
Housing Hand cites property consultancy JLL which forecasts that residential capital values are likely to drop by 1.5 per cent next year, with rents dropping 1.0 per cent.
And it adds that growth in income for landlords will also be a challenge due to increased competition for European migrants from other countries with greater freedom to travel.
“Fewer international tenants, an increase in tenants defaulting on rent and a likely oversupply of rental accommodation shifting the national picture to a tenants’ market rather than a landlords’ one certainly paints a grim picture” warns the service.
However, it does highlight one ray of hope: students.
Group operations director Terry Mason says: “The indications are that the 2021/22 academic year is likely to be a bumper year for students, with little reaction to Brexit.
“We have last year's candidates who decided to take a year out rather than attending university now wanting to start. We also have a larger number of students reaching university age with fewer jobs available, meaning going to university becomes a safer option.
“Then there’s the fact that a larger number of international students started university in 2020 and will thus be returning for their second year.”
Housing Hand says various property consultancy say 30 per cent of first-year students live in privately rented accommodation or at home with parents or guardians in addition to another 30 per cent who live in private purpose-built student accommodation.
As such, a bumper year for university entrants spells very good news for landlords with properties in the right locations it claims.
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Really?
It's boom time. Yes there are a few headwinds. There always is.
I am not entirely sure how this scaremongering is meant to help anyone- or indeed attract HH business. People need homes, for that reason lettings will always be fundamentally stable, yes there will be good and bad times but when you consider the risk involved with other investments at unpredictable times- property shines head and shoulders when balancing risk and reward. Brexit won't have a huge impact by now, many Europeans have already applied for an indefinite right to remain, others will easily meet visa criteria and those that don't will be replaced by a workforce that does- needs must. I'm not sure how stoking the anxiety of Landlords who are constantly getting terrifying clickbait articles about the imminent doom due to regulations, tax changes, shelter campaigns, etc, etc. Most of the country's lettings markets have boomed this year- as London recovers so will its rental market- that's the ebb and flow of property.
It is an advertorial. MD says one thing, perations director says another. Brexit will all settle down in the end and we will get through it and Covid 19.
Whether landlords will survive Boris and his woke anti-private landlord crusade is another matter entirely.
The lettings market in London will be fine - more demand than supply as always.
The lettings market in student towns and cities will, after a crap 2020, also recover.
Not so sure for other areas of the UK though.
My properties are all rented so "I'm alright Jack" I guess for now (student city) but I fear for landlords and agents in the grimmer corners of the country where industries are closing down.
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