Landbay Index Shows London Property Investors Hit by Brexit

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The latest Landbay index has shown that buy to let property investors in London could have lost over £1,800 in rental income since the Brexit vote in June 2016.

The Landbay Index uses a conservative projection to show that rental growth in the capital is now 2.84 per cent lower than expected back in June 2016, but this could be as high as 4.15 per cent.

The higher estimate would leave the average landlord in London £1,806 out of pocket in rent due to subdued rental prices in the capital.

London’s property market has been adversely affected by the uncertainty since the Brexit referendum, with average annual rental growth drop from 1.26 per cent in June 2016 to a low of -0.33 per cent in June 2017, before starting a slow recovery of 0.05 per cent in February 2018 up to 0.58 per cent in December 2018.

However, while the capital has suffered, rental growth in the rest of the UK has stayed largely on track.

The Landbay index shows that the average rent for a property in the UK grew by 0.96 per cent in the year to December 2018, though the national picture continues to be weighed down by slower growth of 0.58 per cent in London.

Rental growth in Wales (1.57 per cent) and Scotland (1.48 per cent) is growing much faster than the UK as a whole (0.96 per cent) and nearly twice the rate of growth of Northern Ireland (0.75 per cent).

On a regional level, Landbay reported rental growth in the East Midlands (2.19 per cent), West Midlands (1.48 per cent) and Yorkshire and Humberside (1.40 per cent) continue to lead the way in terms of rental growth, while growth in the North East (0.01 per cent) continues its downwards trend toward falling rents.

CEO and founder of Landbay, John Goodall, 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. Employment and immigration are the two main concerns for the housing market when considering Brexit.’

He continued: ‘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.’

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