Britons have bought homes in their lowest numbers since 2008 following Brexit. Does this emphasise the need for more rental property investment?
- Owner-occupier home purchases have fallen to their lowest level since 2008 following Brexit
- With a degree of immediate uncertainty while the UK negotiates its way out of Europe, consumers may look to hold off making large purchases such as a new home
- The private rented sector, already at record size, may experience more sustained demand during this period
Has the need for more investment into the UK’s private rented sector (PRS) just been emphasised further with a vote for Brexit?
Demand and sales for new homes from would-be owner-occupiers fell in July following the EU referendum, according to the latest data from the Royal Institution of Chartered Surveyors (Rics). The organisation’s sales index shows a decline last experienced during the global economic crisis of 2008.
At times of economic uncertainty, consumers tend to hold off making large-scale purchases. While the vote for Brexit has not changed any of the key fundamentals that underpin the UK’s property market, Britons may be holding off making moves onto the ladder while the country begins the two-year process of leaving the EU.
However, people will still need a place to live, putting the PRS under the spotlight at a time when it’s already reached record size. Demand for rental accommodation has increased by 17,500 every month for the last decade, with large undersupplies in key cities such as Manchester driving yields for investors.
Knight Frank estimates that the UK’s growing build-to-rent sector, purpose-built rental accommodation for the country’s expanding rental population, will be worth £50 billion by 2020.