The United Kingdom voted, by a narrow margin, to leave the European Union. It seems that many businesses did not expect this outcome. Even some who campaigned to leave did not expect it. Nevertheless, Article 50 will be triggered sometimes in the next few months now that we have a new Prime Minister. What are the implications for landlords, and most importantly for landlords of students?
Negatives of Brexit for Student Landlords
Instability in the housing marking: One of the major concerns for property owners and businesses is uncertainty. Some early predictions have already come true. The dramatic reduction in the stock market and the value of the pound will hit construction. In the coming years, house prices could drop but this will only be bad for people wishing to sell. Rents could drop too, depending on whether foreign investors attempt to sell their properties and create a glut.
Fewer EU students coming to the UK: The UK’s involvement in ERASMUS is uncertain but it is likely the country will no longer be eligible. Much of this depends on how much Theresa May is prepared to listen to the academic community and keep Britain at the forefront of academia. Fewer EU students could mean more from outside, but it is more likely to mean too much available student property.
Legislative changes: The EPC, laws on Right to Rent (which is in conjunction with the EEA of which the UK may still be a part) and HMOs are largely the result of agreed EU directives. Once the UK leaves the EU, some of these may be scrapped or replaced. Landlords simply want to get on with managing their business may not be too happy about yet more legislative changes that affect their profit margin.
Positives of Brexit for Student Landlords
More properties available: There are two factors at play here. Firstly, what measures the UK takes against future immigration once the UK leaves the EU. The second is the attractiveness to foreign investors. It could be that foreign investors no longer see the UK as a market worth investing in – the pound was once seen as a safe haven but may no longer be so. This could mean more properties for British citizen to expand their portfolios.
Impact likely to be short term: All of the uncertainty, many claim, is likely only to have a short-term impact on landlords. The impact will be caused only by the uncertainty and once Article 50 has been triggered, the worst of it could already be over for landlords. Most should be able to ride this storm.
Reduction in regulation: One of the complaints from landlord groups is the amount of red tape with which they are expected to comply. Legal compliance will be expected up to and including the day of exit. Once the UK has moved beyond this, the UK government, which party or parties are in power, will be able to adapt laws. This could be an opportunity for landlords to have their say.