The year of Brexit has arrived and for estate agents, landlords and renters, uncertainty remains about the impact that leaving the EU may have on the rental market.
While pre-Brexit concerns have resulted in the slowest growth in property prices for six years, speculation continues with regards to renting.
While the extent of which depends on the type of agreement secured, leaving the EU will inevitably impact all sectors of the property market. From an expected increase in costs to the risk of EU nationals losing their homes, there are numerous ways in which Brexit could affect landlords, tenancy agreements and renters.
An Increase in Renters
With a deal not yet secured, many may be considering delaying a planned property purchase. While this could see further slumps in price growth, it could mean good news for the rental market – at least in the short term.
This uncertainty could drive people to rent for longer, leading to an increased demand for rental properties. For landlords, this could offer monetary benefits, as it is likely that rents will continue to increase. On the other hand, it could become more difficult for renters. With more competition for properties, this could lead to a saturated market whereby demand outstrips supply. Subsequently, monthly rents and deposits may become more expensive, potentially leaving tenants struggling to balance and budget their finances.
Risk for EU Nationals
For EU nationals, a no-deal Brexit may mean a much more serious problem – something that could lead to a housing crisis. This comes from research by the Residential Landlords Association (RLA), in a report published in 2018. This highlights the need for further clarity with regards to the post-Brexit rental rights of EU citizens and calls upon the government to take urgent action.
This is paramount as many landlords are unsure if they would be able to renew current tenancy agreements with EU nationals, or if new contracts would need to be created in order to comply with UK law. With approximately two thirds of EU citizens in the UK living in rental properties, this could be a real cause for concern for both landlords and tenants.
Changes to UK Legislation
As it currently stands, EU law directly impacts the UK rental market, with legislation that affects both landlords and tenants. This includes energy performance regulations, consumer protection laws and service requirements. In order for this legislation to stay in place, Parliament would be required to vote EU legislation into UK law. Without this step, tenancy agreements as well as landlord and renters’ rights could be subject to change.
