Brexit – Rentals down in London for the first time since 2010

Brexit – Rentals down in London for the first time since 2010

Rent paid for new rental contracts was down in London in July for the first time since November 2010, according to a study realized following the British decision to leave the EU. In a monthly study published Monday, the Countrywide group brought to light an erosion of 0.5% in rental amounts of new contracts in the capital in July in relation to July 2015. 

Johnny Morris, Research Director at Countrywide, explained that a great number of additional residences were placed on the rental market in the past months, which has caused a lowering of rental prices.

He mentioned particular stirring in the sector near spring, when many buyers hurried to close their transactions ahead of a tax increase in April, in order to then offer their new properties for rent.

“In addition, uncertainty in the sales market prior to and following the EU referendum prompted sellers to opt for the rental market,” he explained. 

At the national level, new contract rentals increased by 1.5% from one year to the next.

The decision of Britons to leave the European Union carried with it a wave of uncertainty in the real-estate market of the United Kingdom, particularly in London, where there had been a boom in the past years.   

According to a different study by the Rightmove site, sale prices in the London residential market increased in August by only 2.1% in relation to last year.

Rightmove explained that the number of transactions followed a less hectic business pace during the summer as a result of uncertainty surrounding Brexit.

The report however indicates that the average price of a residence sold in London was still above 619,400 pounds in August (716,500 euros).

Prices were driven up in the past years by the trend of British upper-classes to invest in real-estate, as well as by an influx of investors from the Persian Gulf and Russia. 

(Source: Belga)

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