With the dust now settled on the results of the EU referendum people are truly beginning to take stock of what this change could mean in personal terms. While the numbers never lie, the result was certainly met with an element of surprise – and some trepidation – even from those in favour of leaving the EU.
Whichever way you voted, change may come with an element of apprehension for landlords. We often look to the property market as an early marker of change, but despite the doom and gloom, there could be some positives to come out of the Brexit result for the private landlord.
Whatever your views on the current UK immigration policy, greater immigration rates tend to mean more potential tenants looking for accommodation. The National Association of Landlords and Association of Residential Letting Agents estimate that Brexit will cut levels of immigration resulting in a population 1 million less than previously projected by 2026. This would make the market stronger for the tenant and not the landlord wouldn’t it?
Not exactly. There is more to immigration than simple numbers. The reduced immigration of skilled labourers, for instance, could slow down the development of new properties. As a result, those with strong property portfolios in place and those ready to invest wisely in the right redevelopment projects could find their properties in greater demand.
There was a lot of suggestion pre-Brexit that interest rates could be quite dramatically affected by a leave result. A referendum of this nature carries significant international economic weight so it is reasonable to assume that interest rates could see quite extreme changes post-split. That said, much like the value of the pound, there will almost certainly be a positive bounce back as well for interest rates.
What does this mean for landlords? Well, it will be more important than ever to keep track of the interest rates available with regards to property investments. With more fluctuation, making sure to ‘strike when the iron is hot’ could pay dividends for landlords. In addition to this, changing rates could make buying a property more difficult for first time buyers meaning increased demand in the private rental sector.
How will legislation change? Frankly, at this point we don’t really know. What we do know is that a large number of the rules which govern the private rental sector come directly from the EU. While a lot of these may be retained, there could be some changes. In the interim, the UK will have to a put a transitional act in place to govern this as the UK repeals the European Communities Act 1972. This will allow the government time to amend each law individually, so it will be important for landlords to stay up to date with the law reviews off the back of this.
One potentially beneficial side-effect of this could be that with these law changes, other pipeline legislation might get put on the back-burner. Proposals to extend mandatory licensing to more HMO properties may be shelved for instance allowing landlords greater time to prepare and push back what could have been additional expenses previously far closer to fruition.
With uncertainty, people can be inclined to draw-back and wait for the ship to settle. This means a lot of landlords and property investors taking back seats. For those willing to take the time to educate themselves and keep up to date with the legislative changes that Brexit may bring, this could be a time of real opportunity.
With the biggest changes unlikely to begin until 2018, there is time to prepare for what Brexit has in store.
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty” – Winston Churchill
Whether you are looking for property management services, advice or a home in Glasgow, we can help. Learn more about Mac Flats property services.