The results are in. The majority of the people living in the UK have unanimously voted to leave the EU. Despite last-gasp polls predicting a victory for the Remain campaign, by the time the last vote had been counted, the future was clear: the UK wants out. So what does this momentous decision mean for landlords?
Economic Turmoil
In the short term, there is likely to be a great deal of economic turmoil. Sterling took a huge hit overnight as the financial markets reacted to the news, and although it rallied after the governor of the Bank of England spoke, it seems likely that the UK economy will be wobbly for a while.
The Effect on the Property Market
Uncertainty in the economy will have a knock-on effect on the property market. Many fear that prices will nosedive. If this happens, there will be some bargains to be had, but for those looking to sell, it is not so good. A weak GBP could attract foreign investors to the UK, some of whom will be on the lookout for cheap property. If house prices do fall, new builds will slow down and there will be fewer properties available to buy or rent. This could push rents up.
Economic turmoil may cause another recession, which in turn will lead to a rise in unemployment. Tenants might not be able to pay the rent.
Interest Rates to Remain Low
On the plus-side, interest rates are unlikely to rise any time soon, so borrowing will remain cheap.
Nobody knows what is around the corner, but one thing is certain: we all have to deal with the consequences of voting to leave the EU, good or bad.
