So what does Brexit mean for the Oxford rental market??

Good morning all,

So months on from the UK's decision to leave the EU I have been considering what it might mean for the PRS (Private Rented Sector) Will rents rise, fall or stay broadly the same?




There has been so much post-Brexit analysis on property prices and homeowners that its impact on another key component of the market – the rental sector – has slipped under the radar somewhat.
A growing ‘Generation Rent’ has been a result of a sharp rise in house prices but if there are going to be, as Michael Gove put it, “bumps in the road” before the contours of Brexit Britain becomes a bit clearer, tenants may have to brace themselves for a bumpy ride (at least in the short term).

The key question, inevitably, is what will happen to rents? And will they change in the short or long term? Some experts are predicting they will rise, others that they will fall, and the truth probably lies somewhere in the middle. The popular advice upon the news being broken was to take a 'long, deep and calm breath' to consider what will happen next.

If the broader property market stalls in the next six months, as some experts are predicting, tenants would ordinarily expect to reap the benefit in the form of lower rents. But some landlords may try to put up rents as their buy-to-let costs increased following recent reductions in mortgage tax relief. This is in addition to considerations being carefully given to the impending tenant fee ban (whenever it comes in)

In addition the pressure on the government to curd migration has always been well documented and it could be further highlighted by our decision to leave the EU which could reduce demand in the private rental sector. But much is going to depend on how many properties are available for rent and as we all know, particularly in Oxford demand far outstrips supply.

Given the current circumstances, anyone currently renting or looking for a property to rent would be well advised to bear in mind the following points:

1. Make sure you keep yourself informed about what is happening in the UK property market generally. If there are likely to be rent rises in the pipeline, for whatever reason, it is best to be forewarned. Don’t bury your head in the sand. Stay tuned.
2. Some landlords may take the view that now is not the best time to sell their properties as house prices may be subdued over the coming months. Similarly, those who were thinking of selling may let their properties instead. This would lead to a greater number of properties available across the rental sector. Good news for tenants.
3. On a precautionary basis, budget for your rental costs to rise slightly over the next two or three years. If they do rise, you will be prepared. If they stay the same, you will have money in the bank.

With all the prevailing political uncertainty, tenants are likely to feel many of the same concerns as homeowners in the months ahead. But they need not be unduly despondent. After all, renting property often allows more flexibility than owning property and, in a fast-changing world, flexibility could be your trump card. (for more on this please see my 'Rent Vs Buy' blog)