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What does BREXIT's uncertainty period mean for UK landlords?

As the Brexit deadline looms and the government appears to be no closer to reaching a deal with the EU, it is clear that no one in the UK has escaped the uncertainty of Brexit. It has had a significant impact on every aspect of British life, including the property market, and has affected both the volume of sales and house prices. But it's not just home buyers and sellers that have experienced the impact of Brexit, it has also been felt by landlords and tenants across the country.

Brexit Image

Unlike the sales market, the rental market has continued to grow despite the Brexit crisis and rents in London are increasing. While landlords can be confident of receiving higher rents in the foreseeable future, there have been other consequences of Brexit.

We asked Jason Harris-Cohen, Managing Director of UK property buying companies - Open Property Group and Landlord Buyers, his thoughts. He believes:

"The current uncertainty is causing problems for landlords as people are putting plans on hold. Therefore there lower transaction volumes which results in a buyers market too.

Moreover, rents have softened as buyers and tenants are using Brexit to their advantage when negotiating on prices. Consequently this results in lower profits for landlords if rents are reduced and there is more available stock."

Right to Rent raises concerns for landlords

The right to rent policy, introduced three years ago, puts the onus on landlords to verify the immigration status of prospective tenants. This policy could now be extended to include EU citizens. The Residential Landlords Association (RLA) said the confusion and uncertainty over Brexit means that many landlords are reluctant to rent to EU citizens until there is more clarity regarding the settled status scheme introduced in April. This has led to some landlords only wanting to rent to British tenants.

Another area of concern for the Residential Landlords Association is the decision taken by the Home Office not to issue cards to EU citizens to show landlords that they have a right to live in Britain. This means that landlords will have to use the Home Office website to verify the settled status number of an EU citizen. The RLA has asked the government to publish clear guidelines on the right-to-rent rules for landlords.

Brexit could present an opportunity for investment

While Brexit uncertainty is running high and most people are hesitant to make big commitments, the fall in house prices could present an opportunity for anyone who wants to enter the rental property market. House prices in the southeast and the commuter belt immediately around London are lower than they have been in a decade and this is an ideal time to buy if you are an investor who wants to increase your property portfolio. This situation is unlikely to be a long-term trend so now is a good time to buy. But obviously, landlords who want to reduce their property portfolio because of the uncertainty surrounding Brexit may have to settle for lower prices.

The only certainty about Brexit is the uncertainty and this can make it extremely difficult for UK landlords to make informed property decisions.

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