Post Brexit Life in the Edinburgh Private Rented Sector

77% of letting agents saw no change in rents as a result of
the announcement, whilst 12% of letting agents reported an immediate dip in
rent.  This contradicts expectations, as
before the result 19% predicted rents would increase, and 20% expected them to
fall.  61% thought they would stay the same. 

Supply and demand has also so far been unaffected with 67% of
letting agents seeing no change in supply and 64% reporting no change in the
number of people looking to rent.  Scottish
letting agents have reported a surge in interest from landlords in recent
weeks, showing the confidence in the Scottish market. 

Lenders are continuing to offer very good rates on buy to let
mortgages which is proving to be attractive to Scotland’s many landlords and
investors, who typically reside within Scotland. 

Robert Young, author of the Scottish Property Blog series
says “Inch by inch, we are beginning to see what life will be like in the post
Brexit vote world and there is evidence that life will continue .... as if it
wouldn’t.  There is not enough housing
being built to satisfy the increased demand for housing – this supply and
demand imbalance will not be fundemantely affected by the aftermath of the
Brexit vote, whatever the aftermath may be”. 

It is worth bearing in mind that for the majority of people
property investment is a long term (10-20 year) strategy.  If this is so, then it is a case of
weathering the storm, and things should be OK. 
In the long term things will pick up if there is a blip.  Currently buyers are being a little cautious
which may present itself as an opportunity as fewer people will be jumping in
with both feet. 

RICS , the surveyors’ professional body, has published advice
on its website to members about valuations post-Brexit.  It strongly
implies that surveyors may be in danger of stating too high a price in their
valuation reports.  It suggests a form of wording which essentially
advises customers that the valuation may not be reliable as the “probability”
of that price being achieved in the event of a sale “has reduced”.  So what does this mean for buy to let
property investors?  It means that sellers are more likely to be open to
price negotiation at the moment so you could ‘bag yourself a bargain’! 

In summary, we don’t know what the effect of Brexit will be
on the local market yet.  We don’t know how long it will take to trigger Article
50 and, once it is triggered, we don’t know how long it might take to sort all
of the issues out.  However, if we look
at the performance of the rental market (see accompanying newsletter article on
the Private Rented Sector) we do know there is a huge and growing demand for
rental property. 

For now the rental market remains calm, with no immediate
fallout.  The government needs to
incentivise landlords to stay in the Private Rented Sector, and needs to
encourage institutional investors to stay in the market.  If these 2 groups pull away, tenants will be
further affected as the lack of supply (which is already chronic) will push up
rents. 

The Edinburgh Property Blog will keep you posted on any post
Brexit changes if and when they happen. 

No comments:

Post a Comment

About This Blog

This blog follows the buy to let market in Edinburgh.  You'll find tips, guidance, and analysis that relates specifically to Edinburgh and you'll also find properties from all the estate agents in the city on here that may make decent investments. 

Follow by Email

Robert Young

I operate The Key Place and if you're thinking of buying a property to let in Edinburgh, I'll be happy to advise or just offer a second opinion.  I can be contacted on news@thekeyplace.co.uk, or 0131 603 4570.