Almost a week on from the Brexit result many of my clients are growing ever more concerned about the impact of this monumentous decision made by the Country.
What will this mean for the Landlords of Bedford? How will it affect them ?
What is clear that turbulent times are ahead, but until “the dust settles” we can only speculate.
However at this stage this is my view on the areas that affect the property market and the landlords of Bedford?
We all know that the leaders of the Leave campaign have not committed to the detail of the exit and at present with the disruption within the Conservative party their priorities are there.
What is clear is that this process will not “happen overnight” and Article 50 will not be invoked until there is a new Prime Minister in post which could be as late as October , and from then on there could be over 2 years of negotiations.
So how do we foresee the new Conservative Government will “take back control”?
We currently don’t know how this exit will take place , or how it will be received by the EU . What many may have failed to realise is that there are thousands of laws and regulations dependent on EU directives and treaties and dealing with all these will take up a lot of time in Westminster. And what the outcome will be is still unclear.
With a change of Cabinet , there will be changes to key personnel, such as the Chancellor who may have a differing view in respect of the tax laws which were destined to have a negative impact on landlords. So this could be something positive for landlords.
Interest rates , another unknown and also key to the sector . What will the Bank of England do? Can this run of low interest rates end, or will economic turmoil mean rates remain frozen, or even be cut further?
We also know that there are a series of Legislation changes waiting in the wings such as the Housing and Planning Act and Immigration Act. Will these changes ever come in now? Will the Government , in all this furore find time to implement these changes? Will proposed changes to mandatory HMO licensing also bite the dust?
The EU are big on climate change , and as a result there has been legislation in relation to EPC’s and heat network regulations. We still don’t know how Brexit will affect this.
What we do know is that the Immigration bill will have to change and what of the Right to rent checks which came in earlier this year? With talk of strengthening our borders, will it lead to the Government totally scrapping them or could we find ourselves having to go back and check EU citizens who are in rented property who will now lose their unlimited right to rent? We could also find ourselves looking are even more controls and responsibilities on landlords !!!
Surprisingly the EU were also responsible for a lot of the consumer protection legislation : to include issues around protection from unfair trading which is key for property buyers as well as tenants as it deals with all aspects of property misdescription.
In the long run all of which will have to fall as they are only made under authority conveyed by the European Communities Act 1972.
Which will result in the Government having to look at each element and decide whether they “remain or leave” sounds familiar doesn’t it. But what we cannot determine is which way they will go but clearly we will be keeping an eye on this.
Looking at the markets this could also go either way adapting to the economic shock of exit. The pound has already plunged. Buy may recover slowly once the “dust has settled” however what is clear is that a weak pound is not good for UK investors, as cheaper property will lead to an influx of overseas investors.
With the down turn in the market also having a detrimental affect on lenders this could also have a knock on effect with developers and lead to slowdown in house building and lending
I know that this is not very reassuring and sadly the long-term impact on the UK economy in general, and private renting in particular, cannot be predicted with any accuracy. A period of uncertainty is unavoidable in the short to medium-term while attempts to restore stability are made. We will of course monitor the situation and update you all regularly.
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