Brexit Impact On Residential Rental Market
Belvoir says a survey of its franchisees shows that Brexit is having what it calls “a significant impact” on the Residential Rental Market.
A survey of a random cross-section of Belvoir’s franchisees from across the country, analysed by property expert Kate Faulkner, shows that 86 per cent of franchisees predict that rents are likely to rise or remain static in 2019, with 77 per cent predicting that house prices are likely to fall or remain static.
“Brexit featured heavily in the results of our survey, in which we asked franchisees for their views on whether they thought rents are likely to rise or fall in 2019, and their predictions on house prices.” confirms Belvoir chief executive Dorian Gonsalves.
“In addition to Brexit, our franchisees referred to other reasons including lack of supply and affordability. Typically, uncertainty about the future of the housing market results in three things – low numbers of transactions, price stagnation or falls, and rents struggling to rise, even where demand is higher than supply” he adds.
“However our survey suggests that rents in 2019 may break from past trends, with the majority of offices predicting rental increases or static rents, primarily due to government legislation and shortage of supply. In contrast to this, they are expecting a decrease in house prices.”
Gonsalves says that out of four offices surveyed in the North West – Warrington, Bolton, Burnley and Wirral – all offices are forecasting that rents will increase or stay the same in 2019 due to increased landlord costs from increased legislation and potentially the tenant fee ban.
In the South East, the agency surveyed nine offices, with six predicting that rents will decrease or remain the same, and eight offices predicting a fall in house prices in that region.
“As an example, Belvoir Tunbridge Wells, in the South East, reported that political uncertainty is prohibiting people from putting their properties on the market, and therefore stocks are low. People who have already put their houses on the market in this region are unable to find anything suitable to buy, resulting in an increase in the number of people looking for property in the residential rental market in the three-bed plus family market” says Gonsalves.
He continues: “It is not easy to forecast rental prices and house prices for the year ahead, but political uncertainty is making it even more difficult, with Parliament failing to agree on the next steps for Britain. However, Belvoir franchisees know their own areas extremely well, and are in an excellent position to be able to advise on local market conditions and those areas that have the best opportunities for investment.”
14% of franchisees expect rents to fall in 2019;
27% of franchisees expect no change in 2019;
59% of franchisees expect rents to rise in 2019.
40% of offices expect prices to fall in 2019;
23% of offices expect house prices to rise in 2019;
37% of offices expect house prices to remain the same in 2019.