Lettings agents do not believe supply, demand, or rental costs will be significantly affected by the outcome of the EU referendum, according to the Association of Residential Letting Agents’ (ARLA) May Private Rental Sector (PRS) report.
65% of ARLA agents expect supply to stay the same if the UK votes to leave the EU, compared to 22%, who predict it will fall as international landlords pull out of the market. 31% see demand decreasing, as relocating to the UK becomes a less attractive prospect, but 55% think it will remain as high as it currently is.
In London, 43% of agents expect the number of prospective tenants per property to fall in the event of a ‘Brexit’, as international demand weakens.
While 19% of agents expect a Brexit result will cause upward pressure on rent costs, the majority don’t imagine a huge change for tenants’ rents, should Britain leave the EU.
David Cox, managing director of ARLA, said: “There is no avoiding the EU referendum at the moment and whatever the outcome, we are likely to feel the impact of the fallout of this debate in different ways. However, it’s important to put this into perspective and not get carried away in a zeitgeist.
“As outlined in our recent Brexit Report, the lettings market hosts a large number of non-UK born citizens and any change in migration policy is likely to have an impact down the line, especially in London. However, our monthly report clearly shows the sentiment amongst members is that the immediacy of this effect is likely to be minimal.”
37% of agents report a fall in supply of buy-to-let properties since the stamp duty changes came into effect. This increases significantly in Wales, where 80% of agents saw a dip in supply in May, as well as East Midlands and Yorkshire where 50% of ARLA agents have seen a decline.
48% of agents expect supply will continue to fall as more landlords walk away from the market as a result of the mortgage interest relief changes coming into force next year.
Month on month, supply is consistently lower than in 2015. The number of properties managed per branch dropped in May, with agents recording an average 171 properties on their books. Demand also fell marginally last month, as agents registered 33 prospective tenants per branch, compared to 34 in April.
Cox added: “The EU referendum debate in many ways has stalled policy making and following the vote we need to move from political debate to action. We need supply to increase dramatically and quickly to really deal with the housing crisis as this is one of the most pressing problems facing UK society today.”