What impact will Brexit have on the property market and buy to let market?
The government is slowly working out how to react to the Brexit vote. There has already been a significant impact to the commercial property market due to the volatile financial and economic conditions triggered by the decision to leave the EU. This is likely to extend into the residential market, both sales and buy to let, and continue for some time to come, if the current level of uncertainty continues.
Going forward, there may be changes, or the repeal of some legislation that derives from EU legislations, such as EPCs (energy performance certificates), MEES (minimum energy efficiency standards) and Green Leases, as well as various regulations applicable to residential tenancies.
However, in relation to property law and the buy to let market I can see, the following trends emerging;
  1. buy to let rent arrearsWith a lack of confidence in the economy tenants are more likely to fall into rent arrears as redundancies could be expected and therefore it would be essential, in rent arrears cases, to ensure that early possession is obtained of the rental property so that the property can be re-let. The choice of possession proceedings is crucial, as well as ensuring that the correct notices are served as delays over months in obtaining possession can lead to difficulties in paying the mortgage. For example, if the tenant is alleging that the condition of the property is in a poor state, it may be more beneficial to work out and obtain vacant possession of the property by using a method of seeking possession, which avoids any counterclaim by the tenant.
  2. Allied to this problem is the problem of tenants leaving early and therefore it is essential that tenancy agreements are well drafted with adequate notice provisions protecting the landlord. If the tenant is in breach of their contract, then recourse could possibly be made to the deposit, but some tenants are very wary about the deposit regulations and try and take advantage by seeking to make a claim of damages, alleging a penalty in not protecting the deposit properly against the landlord. I have seen many cases where landlords have taken over property in the conveyancing process and have little documentation about how the deposit was protected leaving them exposed to a large claim for damages for failing to protect the deposit, properly and not providing prescribed information to the tenant
  3. buy to let guarantee agreementDrafting adequate guarantee agreement is also essential in seeking to protect the landlord against the tenant default in which case proceedings can be taken against the guarantor and this provides an additional recourse for the Landlord.
If you would like to discuss how you might be affected by Brexit if you are either already a Landlord or are considering entering the buy to let sector, then do not hesitate to contact me by following this link >>>
breaking news
On Wednesday 14th September, Midas Property Club have joined forces with Barnet Council and Let2Barnet for a FREE event that will be of benefit to Landlords, Property Investors and Developers. It’s called the BARNET LANDLORD FORUM and will take place from 6pm at the Hive Stadium.
Saul Marine & Co will be exhibiting at the Forum and I look forward to meeting with anyone who attends.
Tickets are FREE and can be obtained from this link >>>