Little more than three weeks after the UK vote to leave the European Union the private rented sector is forecasting a brighter future of renewed property investment – says the country’s largest lettings and property sales franchise, Belvoir.
And the promise of a more stable government is giving new hope for both private sector tenants and landlords as well as the wider property market – says Nathan Crombie, who owns the Belvoir office on Western Rd in Brighton.
“We are already seeing renewed interest in property investment and equally high demand from tenants,” says Nathan. “So the indications are that money invested in property will continue to work harder than in many other investment vehicles where returns can be poor.
“Following ‘Brexit’ there may still be unanswered questions, and potential nervousness. For instance – the need for more clarity on the future of EU nationals who have settled in the UK. Many such tenants and workers in the private sector are waiting anxiously for reassurance.
“But, in the meantime, the Bank of England has pegged the base interest rate and given landlords the hope that it will not increase in the immediate future. And interest in tracker mortgages is soaring to a new level, too. So the safer haven of ‘bricks and mortar’ looks set to continue as a much less volatile asset.”
Belvoir’s Managing Director, Dorian Gonsalves, agrees but maintains that “no Brexit result is going to change the fact that we have a serious housing shortage in the UK.”
He explains: “Although the property landscape varies from region to region, the fundamental problem is that we still don’t have enough homes to satisfy the extremely strong demand from tenants who prefer to rent and not enough new homes are being built.
“Theresa May has already said she will remain true to the government’s committed house building policy but the confidence of property investors in the last 12 months – from first-time buyers to experienced landlords – has been badly knocked. The previous administration’s cut in mortgage interest tax relief meant a bigger tax bill for landlords so the Chancellor’s future approach to property taxation is going to have an all-important impact on our future.
“So far, since the referendum vote, the initial dark clouds of uncertainty are giving way to more favourable signs of government stability and a more promising future for the property market in general and the private rented sector in particular.
“We can only hope to see a continuing boost to property sales, purchasing and investment that creates renewed confidence in homes that will increase, not decrease, in value.”