5 Things Brexit Really Means for Landlords
A plunging pound, prime minister and party leaders throwing themselves under the bus, and the total collapse of the country with jobs and investment disappearing and property values falling through the floor. Welcome to Brexit Britain. But, hang on, aren't we just getting a little carried away with the whole Doomsday scenario?
Brexit was obviously a shock to the system, though one you may have thought the powers that be would have prepared for. There was always going to be some economic readjustment.
But do the sensationalist headlines have any basis in fact? What is the real post referendum state of the housing market? Have we all seen our equity vanish? Is our property portfolio worth less than a controlling share in a chocolate teapot company?
Let's take a step back and evaluate. Here are five things we think Brexit may mean for landlords:
1) The world hasn't ended. The property market hasn't collapsed and your portfolio isn't worthless. Richard Lambert, Chief Executive Officer of the National Landlords Association, sounded a sensible note of caution. He said: "Let's just everyone take a long, deep, calm breath. Leaving the EU is completely unknown territory, and jumping to conclusions isn't going to help anyone.
"We welcome Mark Carney's steadying words and his reassurances that the Bank of England and the Treasury have extensive contingency plans in place to ensure the country's financial stability."
2) In the run up to the referendum there were plenty of scaremongering with doom and gloom forecasts of an 18% fall in house prices. Quite how that figure was arrived at was never really explained and looks to be wildly pessimistic.
A fall in prices is probable but, even if there is a dip in the market, it is highly likely to be temporary as the lack of supply will dictate prices bounce back.
3) Any short term fall in house prices may present an opportunity to add another property to your portfolio. Buying in a down market has long being a favoured tactic of investors in any field and, as long as the downturn or depression in the market isn't forecast to last for years, it can be a very profitable strategy. Some sellers may panic so monitor the prices in your area and prepare to act if they begin to shift downwards.
4) Rent levels are likely to remain steady if not increase. Demand for rental accommodation is not about to collapse anytime soon. Even if there is a dip in house prices the affect on rents will be negligible, possibly nonexistent, and demand is likely to continue on its upward trend.
5) Any post Brexit effect on house prices is unlikely to have a lasting impact on a landlords buy to let portfolio. Landlords with mid to long term investments in buy to let properties will see the value of their portfolio recover. Even if there is a short term fall.
All in all, and despite the apocalyptic headlines we have seen following the result of the EU referendum, it seems landlords do have reasons to be upbeat about the future even though there are uncertain times ahead.