Post-Brexit Rental Adjustment

16.11.16

Belvoir's first post-Brexit rental index and a survey of franchise owners from across the company's network confirm that despite uncertainty following Brexit and recent stamp duty increases, the rental market continues to thrive. However, Belvoir's Chief Operating Officer, Dorian Gonsalves warns that the situation could soon become very different if the government fails to reverse its policy for mortgage relief taxation, and introduce measures that will increase the nation's supply of rental properties.

“When we looked at expectations of rental increases or decreases during the next quarter, nobody is expecting a massive change in the run up to Christmas. Historically Q2 and Q3 tend to show an increase and Q4 tends to be when there might be a decrease, as landlords don't want properties to be left vacant at this time of year and so it is an opportunity for tenants to pick up a bargain.

“Two to three bedroom houses remain top of the list for stock shortages, with 81% of offices reporting a shortage of three-bed semi-terraced houses, 68% reporting a shortage of three-bed detached homes and 66.5% of offices reporting a shortage of two-bed houses.

“The majority (42.59%) of franchise owners reported that the average void period for properties in Q3 was up to two weeks. This clearly demonstrates that tenants who want the security of a longer tenancy should make sure they go to a reputable agent, because they are the ones that will ask the right questions, and take care to place tenants in the right accommodation, whilst ensuring that landlords are happy to have longer tenancies in their properties.

"2015 and 2016 are the first years since the recession where wages have been increasing faster than inflation; a situation that is likely to continue until the end of the year. However, there is no doubt that Brexit will result in an increase in inflation next year and when this happens, as it did during the recession, it will hit people's pockets.

“When people are not experiencing wage growth and have less cash in their pockets, landlords in some areas are going to find themselves in a difficult position as they will be incurring tax increases, but will struggle to increase rents to cover this because we know that rental increases can only be in line with wages. This is something that we hope the Government will listen to, and take steps to address."

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