Here is Property Options’ latest update on the UK Buy To Let (BTL) market – for July 2018.
This update is by economist Chris Worthington, who is one of our regular PIM speakers and will be speaking again this month.
Brexit is inevitably featuring more widely in the news as the departure date from the European Union draws near – but what will be the impact on the economy and the housing and buy to let (BTL) market?
According the ONS (Office for National Statistics) the growth of Gross Domestic Product (GDP) in the UK in the first quarter of 2018 was only 0.1% and business investment decreased by 0.2% between the last quarter of 2017 and the first quarter of 2018.
Mark Carney, the Governor of the Bank of England commented “despite a very large stimulus by the Bank of England and fiscal easing by the government, the economy is up to 2% lower than the forecast before the EU referendum and it is reasonable to ascribe some of the shortfall to Brexit.”
Turning to the housing market there is little doubt that the market has slowed down. The Royal Institute of Chartered Surveyors (RICS) reports that despite an improvement in the supply of housing demand remains flat with the deepest downshift in London and the South East.
However prices are still rising in parts of the midlands and the north. Simon Rubinsohn, chief economist at RICS commented “the latest results provide little encouragement that a drop in housing market activity is likely to be reversed any time soon
Stephen Jones, Chief Executive of UK Finance reported that UK Finance was working closely with the government and the European Union to minimise disruption to firms. But he pointed out that there are challenges due to Brexit that could have a significant impact on the mortgage industry and the housing market.
All this suggests that Brexit will have a negative impact on the housing and BTL market but not all commentators agree. Writing in Money Morning, the free daily investment email from Money Week, executive editor John Stepek reviewed trends in the BTL market and concluded that landlords were much more affected by changes in stamp duty, mortgage interest tax relief and future increases in interest rates than in Brexit.
However until we know the details of the deal with the European Union Brexit remains fraught with uncertainty. How should BTL investors respond?
As reported in last two editions of the market overview the increase in house prices and rents in the short term will be moderate in most parts of the UK. To take this into account BTL investors should look closely at the annual rental yield before making a new investment.
Find Out More
We will be delving into these issues and more, as Chris is speaking at our next PIM on Thursday 26 July 2018 at Future Inn, Bristol City Centre, 6-9 pm.
We hope you will join us then.
For more info and to reserve your place Click Below