It already feels like it’s been in the air forever, and there’s a long time until it’ll be finalised, but this week will go down in history as the week that Prime Minister Theresa May triggered Article 50 and kicked off negotiations to break the UK away from the EU.
But what exactly down this mean for the country’s landlords? Will this the straw that ‘Brexits’ the camel’s back, or will the ‘fresh start’ it provides be an opportunity for growth and prosperity?
In the short term…
The triggering of Article 50 is likely to bring a little boost to the slightly sluggish rental market – as tenants feel a renewed sense of confidence in the future. However, this isn’t guaranteed to last.
As negotiations continue, it can take just a little bad news to knock the confidence of the nation’s movers again. It could be a rocky couple of years, however there is light at the end of the tunnel, and with a date in place, it’s possible that some of the uncertainty that has been putting the brakes on the market for the past year may be lifted.
What if I’m looking to expand my portfolio?
For investors looking to find a BTL property, it’s still a mixed bag. Following the stamp duty increases and changes to tax due next week, there’s little encouragement to take the plunge and expange your BTL portfolio. However, if you can make the sums work, there is still a good argument for investing in property!
Whilst red-tops may be screaming that we’ll never see foreign investment in the UK again, that’s certainly not true in the property market… it’s expected that during the Brexit negotiation period we will continue to see investment in property from overseas.
What about prices – how will it hit my bottom line?
People’s ability to buy property is a political hot potato, and following the vote for the UK to exit the EU, figures from HM Revenue and Customs revealed that UK Housing Transactions fell by 9% in the second half of 2016 – buyers were reluctant to take the plunge until they were aware of the upcoming situation. With sellers reluctant to sell, property stock is at a premium, and with buyers desperate to buy, prices are forced up, pricing many out of the buying-market, and back into the private rental sector.
With more and more are turning to the rental market, prices are creeping steadily up across the UK, bad news for tenants – but something that many landlords will welcome, especially considering the other factors they’re facing!
With increased costs landed on landlord thanks to tax changes, and the planned scrapping of letting agent admin fees, with it looks like rental rates will only go one way as we part company from Europe.
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