A parliamentary committee has published its findings on how Britain’s decision to leave the European Union will affect the housing market, particularly in relation to the effect of non-UK nationals leaving the country.

The committee investigated the impact Brexit would have predominately on the workforce within Britain’s multi-trillion-pound property industry – including sales, lettings, and property management.

Following the formal exit from the bloc in 2019, EU nationals living in Britain will have to follow the same processes to work in Britain as non-EU national. There are concerns that large swathes of both groups will decide to work elsewhere.

The committee came to the conclusion that on the whole, losing these individuals would not cause a great threat to the market.

“The work of UK-based Estate Agents is primarily domestic and is generally not highly dependent on EU labour”, said the committee.

On the other hand, the UK has a high proportion of renters who are non-British. The English Housing Survey of 2015/16 shows that nearly 25% of all rental properties are occupied by people not originally from the UK. If this collective were to leave following the EU departure, there would be a significant impact on the housing market.

Those who are not of a British or Irish origin own 3.4% of owner-occupied housing, a figure that skyrockets when London’s central prime locations are investigated. These properties are within the highest 5% of the market by price. In fact, nearly 18% of London new-builds were sold to foreign buyers in 2016, according to a University of York report.

What do leading individuals in the property industry think about the impact Brexit will have on the rental sector?

Agent Wow asked three leading figures within the rental market their thoughts.

Elliot Castle, Founder and CEO of homebuying service We Buy Any Home, believes Brexit may result in rental prices falling.

“EU residents residing in the UK who currently rent property should feel confident in their current position, following Teresa May’s recent appeal to EU Citizens living in the UK, which promises them an easy route to settlement. There may still be issues for non-EU residents however, as their future in the country is yet to be determined. In addition to this, it’s unclear how economic changes will impact rental prices,” Castle commented.

“Brexit has already had a negative impact on the number of Europeans living in, or moving to, the UK – and this number is predicted to continue decreasing throughout 2018. This movement indicates that many properties, once occupied by foreign tenants, will become available. If more and more properties become available within the lettings market, it’s likely we will see a fall in rental prices – as landlords will need to offer competitive prices in order to attract tenants.”

“Brexit may also affect the ‘buy-to-let’ market, which was previously very reliable in providing fluidity within the overall property market. This is because an increase in the number of rental properties available will make it difficult for landlords to find tenants and generate an income. For this reason, they may choose to sell the property instead of letting it out. A lack of tenants may also deter buyers from purchasing a property and renting it out, so the buy-to-let market may become stagnated,” said Elliot Castle.

Alexandra Morris MARLA, Managing Director of MakeUrMove, offers a diverging view, believing the rental sector could benefit from Brexit, and rent prices may even rise.

“Brexit isn’t necessarily all doom and gloom for the lettings industry. In fact, the private rental sector could benefit from Brexit in the short-term as people could be less inclined to buy or sell houses until they understand the full impact of Britain leaving the EU. This could see an increase in the number of people renting until there is a clearer picture of the implications of Brexit on the housing market,” Alexandra Morris MARLA commented, adding:

“This increased demand, along with a number of regulatory and taxation changes, will likely contribute towards rent rises.”

However, the MakeUrMove Managing Director voices concern about the decrease in numbers of European migrants could have on a private rental sector.

“On the other hand, there could be an oversupply of rental properties in certain areas where there are large numbers of European migrants. Whilst it’s predicted that the majority of European nationals will remain in the UK after Brexit, a significant number will return to their home country or to another European country as businesses relocate,” Alexandra Morris MARLA commented.

“In addition, there has been a reduction in the number of European students applying for university placements, which will also have a knock-on impact on the student rental property market.”

“If Brexit impacts the earning capacity of tenants, this may see landlords losing money on rental property at a time when they are less able to sell properties. With the private rental sector dominated by a large number of small landlords who often operate on very tight margins, or even run at a small loss, instability could leave them in difficult financial situations with some in the industry even suggesting that a housing crash could be triggered by landlords defaulting on their buy-to-let mortgages and selling off rental property.”

“It remains to be seen exactly what impact Brexit will have, but it’s important that the government puts plans in place to support landlords and tenants alike.”

Alejandro Artacho, CEO of Spotahome, remains optimistic about the rental market in the wake of Brexit. Artacho commented:

“Despite concerns around the impact of the Brexit referendum on the rental market, at Spotahome, we have found that contrary to popular belief, the number of Europeans looking for accommodation in London remains high.”

“The status of European nationals and immigration rules are yet to be decided upon, however we expect that major cities such as London will remain rental hubs. This will continue to attract people from not only Europe, but from all over the world. In light of this, we don’t expect there to be too significant a decline in migrant numbers.”

“The lettings industry could initially face a slight fall in the number of people looking for accommodation as the dust around Brexit settles. However, we expect that the fall in demand from tenants won’t last for long. Europeans dominate the search for accommodation via the Spotahome platform, with the largest number of bookings stemming from France (22.2 percent) followed by Spain, Germany and Italy.”

“The second largest number of bookings came from within the UK (11.9 percent) which indicates that for the time being there is still a healthy demand for accommodation coming from within Great Britain,” Alejandro Artacho added.