The EU referendum still remains too close to call, but whatever the outcome of today’s vote, letting agents do not believe that it will have much of an impact on the rental market.
A new report from the Association of Residential Letting Agents (ARLA) suggests that supply, demand, or rental costs will not be significantly affected if the UK votes to exit the 28-member state today.
Two thirds (65%) of ARLA agents expect supply to remain stable if the UK votes to leave the EU, compared to just a fifth (22%) who forecast that it will fall as international landlords pull out of the market.
A third (31%) see demand decreasing, as relocating to the UK becomes a less attractive prospect, but over half (55%) think it will remain as high as it currently is.
In London, almost half (43%) of agents expect the number of prospective tenants per property to fall in the event of a ‘Brexit’, as international demand weakens.
While one in five agents (19%) of agents expect a Brexit result will cause upward pressure on rent costs, the majority do not think it will have a major impact on tenants’ rents.
David Cox, managing director of ARLA, commented: “There is no avoiding the EU Referendum at the moment; and whatever the outcome, we are likely to feel the impact of the fallout of this debate in different ways. However, it’s important to put this into perspective and not get carried away in a zeitgeist. As outlined in our recent Brexit Report, the letting market hosts a large number of non-UK born citizens and any change in migration policy is likely to have an impact down the line, especially in London. However, our monthly report clearly shows the sentiment amongst members is that the immediacy of this effect is likely to be minimal.”
Meanwhile, ARLA report that a third (37%) of agents have seen a decline in the supply of buy-to-let properties since the stamp duty changes came into effect in April, with almost half of agents (48%) expecting supply to fall further in the coming months as more landlords walk away from the market as a result of the mortgage interest relief changes coming into force next year.
Cox added: “The EU referendum debate in many ways has stalled policy making and following the vote we need to move from political debate to action. We need supply to increase dramatically and quickly to really deal with the housing crisis as this is one of the most pressing problems facing UK society today.”