18^th Jan 2019

London landlords have been badly affected since the Brexit vote in 2016 and could have lost £1,806, according to a BTL lender's latest rental index.

The Rental Index's cautious projection claims that the capital's rental growth is currently 2.84% lower than originally forecasted way back in June 2016; however it could be as bad as 4.15%.

If the higher guesstimate is true then on average London landlords would have lost £1,806 in rent because of the suppressed rental growth.

London's property prices have probably been affected most by the ensuing uncertainty of the outcome of Brexit since the referendum. The capital's annual rental growth dropped from 1.26% in June 2016 to as low as -0.33% in June 2017.

In February 2018 the capital's rental price growth started a slow increase of 0.05% and finished the year at 0.58%.

The rest of the UK has followed the projections for rental growth with the capital being the only area to experience a fall in growth.

During last year the average rent increased by 0.96% with the overall growth throughout Britain being hampered by London's 0.58% increase, as the rest of the UK increased on average by 1.16%.

Both Wales and Scotland's rental growths are outperforming the UK's average of 0.96, by 1.57% and 1.48% respectively.

Regionally East Midlands' rental growth of 2.16% is the highest in the UK whilst the West Midland's 1.48% and Yorkshire & Humberside's 1.40% are well above the national average; the North East continues its downward spiral with the annual rental growth of just 0.01%.

John Goodall, CEO and founder of the lender, said: “It’s hard to ignore the impact that the vote to leave the EU has had on property market in London. While tenants are better off, without necessarily realising it, uncertainty in the market has caused a conundrum for landlords.

“Many landlords will have been looking to offset the government’s punitive tax regime by raising rents. However, the uncertainty surrounding Brexit has forced the vast majority to forfeit this to maintain a steady income.

He continued: “Employment and immigration are the two main concerns for the housing market when considering Brexit.

“While nobody is any clearer about Britain’s future relationship with the EU, it’s clear the impact of a no-deal Brexit would be significant for the UK economy and property market.

“Brokers need to access the current landscape and provide insight to their clients on potential issues that may arise for them in the future.

“Despite a drop in rental growth the market continues to show resilience.”


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