Lettings Market Will be Unaffected in Short-Term by EU Referendum Result

The lettings market will be unaffected in the short-term by the result of today’s EU referendum, regardless of the outcome, according to the Association of Residential Letting Agents (ARLA).

ARLA’s member letting agents believe that supply, demand and rent prices will stay at the same level for the near future, whatever the result of today’s crucial vote.

Although the private rental sector looks to be unfazed by the referendum result, Stamp Duty changes continue to be an issue for the lettings market.

ARLA’s May Private Rental Sector report found that two thirds of agents expect supply to stay the same if the UK votes to leave the EU, compared to just a fifth who predict it will decline, as international investors leave the market.

Almost one third (31%) believe that demand will drop as a result of a Brexit, while 55% think it will remain as high as it is currently.

However, two months on from the introduction of the 3% Stamp Duty surcharge for buy-to-let landlords, letting agents are starting to feel the effects.

A third (37%) of agents have reported a decrease in the supply of rental properties since the Stamp Duty changes came into force. The proportion rises significantly in Wales, where 80% witnessed a dip in supply, as well as in the East Midlands and Yorkshire and the Humber, where exactly half of ARLA member agents saw a decline.

Around half (48%) of agents predict that supply will continue to drop, as more landlords vacate the private rental sector as a result of the changes to mortgage interest tax relief, which come into force from next year.

The Managing Director of ARLA, David Cox, comments: “There is no avoiding the EU referendum at the moment, and whatever the outcome, we are likely to feel the impact of the fall-out of this debate in different ways.

“However, it’s important to put this into perspective and not get carried away. As outlined in our recent Brexit report, the lettings market hosts a large number of non-UK born citizens, and any change in migration policy is likely to have an impact down the line, especially in London.

“However, our monthly report clearly shows the sentiment among members is that the immediacy of this effect is likely to be minimal.”

Yesterday, we released the results of our own EU referendum poll, which found that over 60% of landlords and property professionals believe that we should stay in the EU.