Uncertainty over Brexit is thought to be having a significant impact on rental and house prices, according to a recent Belvoir survey.
Analysed for Belvoir by property expert Kate Faulkner, the random cross-section of Belvoir’s franchisees shows that 86% predict that rents are likely to rise or remain static in 2019, while 77% predict that house prices will likely do the same.
Dorian Gonsalves, chief executive officer of Belvoir, said that Brexit featured heavily in the results of the survey. Other reasons included lack of supply and affordability.
“Typically, uncertainty about the future of the housing market results in three things – low numbers of transactions, price stagnation or falls, and rents struggling to rise, even where demand is higher than supply,” he added.
“However, our survey suggests that rents in 2019 may break from past trends, with the majority of offices predicting rental increases or static rents, primarily due to government legislation and shortage of supply. In contrast to this, they are expecting a decrease in house prices.”
The survey also found that all offices surveyed in the North West – i.e. Warrington, Bolton, Burnley and Wirral – are forecasting that rents will increase or stay the same in 2019 due to rising landlord costs from increased legislation and potentially the tenant fee ban.
Nine Belvoir offices were surveyed in the South East, with six predicting that rents will decrease or remain the same, and eight offices predicting a fall in house prices in that region.
Gonsalves explained: “As an example, Belvoir Tunbridge Wells, in the South East, reported that political uncertainty is prohibiting people from putting their properties on the market, and therefore stocks are low.”
“People who have already put their houses on the market in this region are unable to find anything suitable to buy, resulting in an increase in the number of people looking for rented property in the three-bed-plus family market.”
Feedback from its Belvoir Tadley office, which is also in the South East, states that the underlying fear of a ‘substantial negative blow’ to house prices due to Brexit will cause an influx of new instructions, which in turn will push down prices overall.
However, the Belvoir Doncaster office in Yorkshire has a more optimistic outlook on the market, as there is substantial investment planned for the region, which expects a good return on investment.
“It is not easy to forecast rental prices and house prices for the year ahead, but political uncertainty is making it even more difficult, with Parliament failing to agree on the next steps for Britain,” Gonsalves went on. “However, Belvoir franchisees know their own areas are extremely well, and are in an excellent position to be able to advice on local market conditions and those areas that have the best opportunities for investment.”
He advised anyone who is in the process of deciding whether to buy, sell, invest or rent, to make contact with their local agent.