Brexit shouldn’t have a major impact on the private rental sector (PRS) however potential changes including rental caps and the introduction of a ‘Right to Buy’ for private tenants could be devastating.
That was the view of a panel of lender representatives who were speaking at today’s FSE Midlands show, which took place today at the Ricoh Arena in Coventry.
When quizzed about whether Brexit would have a major impact on the UK PRS, Steve Cox of Fleet Mortgages, said: “Whatever happens regarding Brexit, the PRS will survive.”
However, Cox was not so confident when asked how some of the recent policy proposals from the Labour Party might land on the sector, especially a cap on rents and the introduction of a policy which would see existing tenants given the right to purchase their home from landlords, potentially at a discounted price.
Cox said: “That would have a sizeable impact especially the ‘Right to Buy’. I do however think it’s unlikely to happen because you would have to legislate that someone’s privately-owned assed can be sold at a discount. That principle simply doesn’t sound right, plus of course social housing can’t be created overnight to replace the PRS. The threat is there but in my view it won’t happen.”
Members of the panel did however suggest that resolving Brexit in any way might unleash a significant amount of pent-up demand into the mortgage market, with potential purchasers and sellers currently waiting for an outcome to the current political situation before taking action.
Adrian Moloney of OneSavings Bank agreed that the current political impasse was having a sizeable impact. “Brexit has stopped people from doing things,” he said. “They won’t make a decision until they know what’s going to happen. In that sense, resolving Brexit might be seen as an opportunity for mortgage intermediaries.”