As the dust settles on post-Brexit Britain, letting agents Belvoir is calling for government action to restore confidence in the market.
Belvoir managing director, Dorian Gonsalves, said: “Pre-referendum uncertainty, combined with George Osborne’s mortgage tax relief cuts, increased stamp duty for buy-to-let investors, stringent BTL mortgage requirements, and a lack of commitment to new affordable housing has contributed to a cooling of the rental investment market in many areas of the country, putting further pressure on stock levels as our franchise owners work hard to meet growing tenant demand.
“Now that the referendum result has been decided, many of our franchise owners are reporting a ‘back to business’ mentality from landlords. With the Bank of England hinting at further reductions in interest rates, which will continue to hit savers, property remains a very attractive long-term investment opportunity, particularly for those with cash to invest.”
However, in some areas continued uncertainty over the future of EU nationals in the UK is having a negative impact.
Gonsalves added: “Over in Boston in the East Midlands, which was reported as being the most pro-Brexit town in the UK with 75% of the population voting to leave, thousands of EU workers remain anxious about their immigration status. We hope that the government will act quickly to resolve this uncertainty and reassure EU citizens about their future in the UK. This will also help to reassure those overseas landlords who are also expressing concern.”
Donna Burrell, owner of Belvoir Boston, reports that although the rental and sales market has now picked up, there is continued anxiety amongst Eastern European workers, with many now adopting a ‘wait and see’ attitude before committing to investments.
“During the build up to the referendum we noticed that business was quiet,” said Burrell. “Belvoir Boston now provides an estate agency service, and prior to the referendum many Eastern European tenants who had been working and renting in the area had started to buy the properties they had been renting. Now that Britain has voted to leave the EU we have noticed a more cautious ‘wait and see’ approach and some have pulled out of sales. There has also been some racist backlash from a minority group, which is making Eastern European tenants and foreign investors feel uncomfortable about committing to investment.
“Boston is reliant on Eastern European migrants to work in factories and keep local businesses afloat. If these workers feel forced to leave, it could potentially be catastrophic for the town, its people and local businesses. I really hope that the government will end the uncertainty by giving out a strong message of reassurance, as many of these people have worked and lived here for several years, and contribute enormously to the community.”
Emma Falco, co-owner of Belvoir Peterborough, just 30 miles from Boston, added:: “Brexit has certainly been a hot topic for landlords and tenants, but whilst there is a lot of conversation surrounding it, it doesn’t seem to have deterred serious investors. In fact, I think many still have the 2008 crash in their minds and are hopeful that they may be able to pick up a property bargain in the coming months if the market drops, as predicted. Now that property prices have risen back to their 2007 values many investors wish they’d had the confidence to buy when prices plummeted in 2008.
“In my opinion, investors should still consider property as one of the best places to put their money. For example in Peterborough, an average rental property would generate a landlord a 9% return on the capital they employ. Investors will not get anywhere close to this by leaving their money in the bank. Regardless of what happens to property prices in the short term, the demand from tenants is ever-growing.”