Next year is set to be a challenging one for the rental and buying property markets
Rent costs in the UK’s private rented sector will rise in line with increased demand from prospective tenants and the impacts of the tenant fees ban in 2019, according to letting agents.
But estate agents believe that house prices will soften as the supply of available homes increases following a year that has been difficult for landlords, home owners and the UK in genera.
But next year could be just as challenging, according to forecasts from the Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA).
Some 65% of ARLA members believe that rents will rise next year, up from 59% when lettings agents were asked the same question last year and 67% think landlord taxes will rise gain in 2019.
Some 53% think demand will continue to rise while 78% predict that the number of landlords operating in the private rented sector will decline next year, as they are driven out by rising costs.
David Cox, ARLA chief executive, pointed out that the private rented sector has seen considerable change over the last few years, and there are difficult times ahead with the tenant fees ban is expected to come into effect next year.
‘With all the new legislation landlords have faced over the last few years, landlords have found themselves either being pushed out of the market or forced to pass rising costs on to tenants, a trend which we’ll continue to see next year,’ he said.
‘However, looking further ahead we firmly believe that the industry will come out stronger, more professional and better respected at the other side. The best landlords and agents will adapt and survive to the new circumstances, keeping the sector afloat,’ he added.
The NAEA has found that 43% of estate agents expect house prices to fall next year, while 39% think supply will increase and 35% think demand will drop.
The outlook is driven by uncertainty over Brexit, with 46% of agents agreeing that a no-deal Brexit will have a negative impact on the housing market.
Meanwhile, as home owners put off plans to move in light of Brexit, some 62% of estate agents think the trend of renovating rather than moving will continue in the New Year.
‘As we look ahead to 2019 Brexit is undoubtedly fuelling a sense of apprehension in the housing market, which in turn affects sentiment. With details of the final deal still unknown, both buyers and sellers will continue to hold off on making any decisions,’ said Mark Hayward, NAEA chief executive.
‘However, this slowdown presents a window of opportunity for first time buyers who will find more affordable properties, granting them greater bargaining power,’ he explained.
‘We usually see demand spike in the first few months of the year, but the landscape will probably be very different in 2019 as buyers sit on the fence and adopt a ‘wait and see’ strategy until the Brexit deal is complete,’ he added.