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.