How Brexit is Affecting Build to Rent
Brexit has dominated headlines in 2019 – and is on the minds of landlords as they wonder how the referendum will impact the build to rent (BTR) market.
While many landlords fear a market disruption due to economic uncertainty, an unstable housing market is causing many would-be home buyers to rethink their plans. As renters seek to stay and shortages in social housing push up demand, projections indicate the rental market should remain secure.
Indeed, growth in the BTR market has increased this year, with 34,840 units completed across the UK, compared to 26,633 in the third quarter of 2018 – a 20% increase in the last year.
There's much to be positive about in the maturing private rental sector (PRS) as developments continue to appear across London and contribute to solving the housing crisis. Thanks to strong demand driven by students, a transient professional workforce and those more suited to renting than buying, it is expected that developments in the PRS will continue to see growth post-Brexit.
Overseas investors and developers from within the UK are jumping on the opportunity for long-term security during a period when other markets are cooling. Other factors, including a less competitive land market due to larger housing projects stalling, rising mortgage rates and strong demand from populations more comfortable with renting than buying, are combining to make the outlook positive heading into the new year.
While the exact influence and impact of Brexit on BTR continues to be uncertain, many in the sector predict landlords – and the industry as a whole – will prove resilient.
What you need to know
- While some tax changes and new regulations may negatively impact buy-to-let landlords and others in the housing market, the outcome for BTR may be more positive.
- Despite increasing rental costs in some areas of the country, it may be too soon to consider raising rents.
- To reduce risk of rental void periods, ensure your rental property is well-maintained, clean and safe.
As the Brexit saga continues, we'll keep you up to date on developments and how they could impact you heading into 2020.