The Association of Residential Letting Agents’ (ARLA) June Private Rental Sector (PRS) report has found that the rental market has not yet showed signs of being hit by the vote for Brexit.
Immediately following last month’s Brexit result there was little to no movement in terms of rental costs. While 12% of agents reported an immediate dip in rent, 77% saw no change. ARLA says this contradicts expectations, as prior to the result 19% predicted rents would increase, and 20% expected them to fall. Only 61% thought they would stay the same.
Similarly, the supply of available properties and demand for housing remained the same immediately following the result. 67% of ARLA members reported no change in supply, and a further 64% reported no change in the number of prospective tenants looking for properties.
However, since the result 45% of letting agents have witnessed uncertainty from landlords looking to let properties, which could cause waves in the rental market over the coming months.
David Cox, ARLA’s managing director, said: “The rental market has responded to Brexit in a calm fashion, with no immediate fallout amid extreme political and economic uncertainty. What we need is some certainty from the new government that housing remains a priority with the rental market playing a central. For example, we want to avoid a situation where institutional investors start pulling away from the market because ultimately this will impact tenants by squeezing supply further and pushing up rents.
“Although we’ve seen some hesitation from landlords this is relatively mild and it’s important they do not act in haste. Any inevitable longer term changes will then be taken on board with greater ease.”
Month on month, demand for rental accommodation was up in June, as was the supply of properties managed on letting agents’ books. There were 37 prospective tenants on average registered per ARLA member branch in June, up 12% from 33 in May. The supply of rental properties rose by 3% in June, from 171 in May to 176 properties on agents’ books this month.
Cox added: “If one thing is clear following Brexit, it’s that supply and demand remains a real issue in the rental market. If supply continues to dwindle against growing demand, no matter what the eventual implications of Brexit are, renting will become more difficult and expensive for tenants.”