Brexit had caused a lot of uncertainty in the housing market. The effect may likely linger thereby causing an increase in rent. In 2016, indices, as published by the office for National statistics, shows that the price for most properties was high across the UK. According to the report, the number of buyers has increased compared to the number of houses on sale. Brexit caused share prices of many estate agents to tumble.
According to a report published last year by Landbay, rents rose by about 1.12 percent in 2016 till November. This simply means that the tenants who rent from private landlords are totaled at £1,188 per calendar month, an increase from £1,177 at the turn of the year, an extra £11 each month or £132 per year.
According to John Goodall the Chief executive of Landbay, the stability that renters enjoyed last year may not be the case this year. He attributed the stability to the raft of regulations, political and economic challenges that came to bear on the buy-to-let sector in 2016.
Last year a new stamp duty levy was imposed on landlords who purchase new buy-to-let properties in April 2016 which caused a hike of buy-to-let purchases in the first three months. These properties were then released for tenants to rent during the summer. It provided more choice and it reduced rents temporarily.
This year, the Bank of England is likely to introduce tighter mortgage control measures and tax relief’s will be removed for buy-to-let. These measures would exert more pressure on most landlords finances. The resultant effect would be a hike in rent.
Jake Russell, who is the director at Russell Simpson said unlike 2014, 2015, and 2016, this year is full of uncertainty and would breed caution and a lot of indecision in the housing market.
However, on the contrary, James Evans, CEO of estate agency of Douglas & Gordon believes that no matter the uncertainty, there is hope for the housing market. According to him, history suggests that after years of low transactions is followed by years of increased activity.
Some areas in Birmingham Curzon street have experienced rent increase of about 23.7 within a period of five years. This is high compared to the national average of 8.8 percent. Presently, rents in Birmingham have also increased to about 22.4 percent. Other cities like Leeds and Sheffield have experienced an increase in rent by 15 percent since January 2012.
Londoners who reside in boroughs close to future Crossrail 2 stations will also experience an increase in their rent.