JANUARY 14, 2019 | BY A & S Property
BTL landlords in London are already worse off because of Brexit
MPs will finally hold their vote on Theresa May’s Brexit deal tomorrow, with just over two months to go before the UK is set to leave the European Union.
Remarkably, the PM’s template to exit the bloc faces virtually certain defeat – by an eye watering majority of 228, according to the BBC.
But there are some MPs, including the chancellor Philip Hammond who believes that there is no version of leaving the EU that will increase prosperity in this country.
Hammond recently said that the UK will be worse off “in pure economic terms” under all possible Brexit outcomes, although not everyone agrees on this.
But new research claims that some landlords, most notably in the capital, are already worse off since the vote to leave the EU in June 2016.
Landlords in London are potentially £1,806 worse off since the vote to leave the EU in June 2016, according to the latest Landbay Rental Index.
The data suggests that rental growth in London is almost 3% lower than projected rate of growth since EU referendum announcement, although tenants won’t be complaining about this.
Using a conservative projection, rental growth in the capital is now 2.84% lower than expected back in June 2016, but this could be as high as 4.15%. This higher estimate would leave the average landlord in London £1,806 short in rent due to subdued rental prices, or £1,217 for the mid-point, LandBay said.
London’s property market has been adversely affected by the uncertainty since the Brexit referendum, with average annual rental growth drop from 1.26% in June 2016 to a low of -0.33% June 2017, before starting a slow recovery 0f 0.05% in February 2018 up to 0.58% in December 2018.
But the rest of the UK has largely stayed in line with expectations for growth, with the drop in rental price growth being confined to London.
The average rent for a property in the UK grew by 0.96% in the year to December 2018. The national picture continues to be weighed down by slower growth of 0.58% in London.
Excluding the capital, the average rent for the rest of the UK increased by 1.16%.
On a regional level, rental growth was led by the East Midlands, at an average of 2.19%, followed by the West Midlands at 1.48% and Yorkshire and Humberside at 1.40%.
John Goodall, CEO and founder of Landbay said: “It’s hard to ignore the impact that the vote to leave the EU has had on property market in London. While tenants are better off, without necessarily realising it, uncertainty in the market has caused a conundrum for landlords.
“Many landlords will have been looking to offset the Government’s punitive tax regime by raising rents, however the uncertainty surrounding Brexit has forced the vast majority to forfeit this to maintain a steady income.
“Employment and immigration are the two main concerns for the housing market when considering Brexit. While nobody is any clearer about Britain’s future relationship with the EU, it’s clear the impact of a no-deal Brexit would be significant for the UK economy and property market.”
“Brokers need to access the current landscape and provide insight to their clients on potential issues that may arise for them in the future. Despite a drop in rental growth the market continues to show resilience.”
Landbay Rental Index, powered by MIAC: Countries (All Beds)
Landbay Rental Index, powered by MIAC: Regions (All Beds)
Landbay Rental Index, powered by MIAC: Countries by Number of Beds
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