The decision by the UK to leave the European Union has not yet affected the country’s private rental market with rents, supply and demand not changing significantly after the vote in June.
The latest monthly report from the Association of Residential Letting Agents (ARLA) says that the rental market is stable, with little to no movement in terms of rental costs.
While some 12% ARLA agents reported an immediate dip in rent, an overwhelming 77% saw no change. This contradicts expectations, as prior to the result some 19% predicted rents would increase and 20% expected them to fall while 61% thought they would stay the same.
Similarly, the supply of available properties and demand for housing remained the same immediately following the result. Some 67% of ARLA members reported no change in supply and a further 64% reported no change in the number of prospective tenants looking for properties.
However, since the result 45% of letting agents have witnessed uncertainty from landlords looking to let properties, which could cause waves in the rental market over the coming months.
‘The rental market has responded to Brexit in a calm fashion, with no immediate fallout amid extreme political and economic uncertainty. What we need is some certainty from the new Government that housing remains a priority with the rental market playing a central,’ said David Cox, ARLA managing director.
‘For example, we want to avoid a situation where institutional investors start pulling away from the market because ultimately this will impact tenants by squeezing supply further and pushing up rents,’ he explained.
‘Although we’ve seen some hesitation from landlords this is relatively mild and it’s important they do not act in haste. Any inevitable longer term changes will then be taken on board with greater ease,’ he added.
The report also shows that month on month, demand for rental accommodation was up in June, as was the supply of properties managed on letting agents’ books. There were 37 prospective tenants on average registered per ARLA member branch in June, up 12% from 33 in May. The supply of rental properties rose by 3% in June, from 171 in May to 176 properties on agents’ books this month.
‘If one thing is clear following Brexit, it’s that supply and demand remains a real issue in the rental market. If supply continues to dwindle against growing demand, no matter what the eventual implications of Brexit are, renting will become more difficult and expensive for tenants,’ Cox concluded.
source: Property Wire
