Both The Association of Residential Lettings Agents (ARLA) and Homebuyer Events believe the expansion of the EU will attract hundreds of thousands of immigrants to the UK, which will in turn increase the demand for rental accommodation.
Nick Clark, Managing Director of Homebuyer Events who run the Homebuyer Show and Property Investor Show says: “With the UK already among the most popular choices for asylum seekers, the prospects of significant inflows of workers, both manual and professional is significant. We are talking about potentially hundreds of thousands of people, which is likely to create a marked increased demand for rentals.
“With limits to supply, this can only bid up rents, and send the buy to let sector into another boom phase.”
John Wriglesworth, Senior Economist for Hometrack, the independent property research company comments: “There is no doubt that the new members to the EU will open up the floodgates for migrant workers into the UK. I would expect well over 100,000 extra job seekers, nearly all of which will require rental accommodation. This could have a major impact on the buy to let market, especially in London and the South East where most new job opportunities exist. I would expect rental yields to rise this year as a result.”
However ARLA warns that landlords need to take care when vetting potential tenants.
Malcolm Harrison, spokesperson for ARLA said: “ARLA surveys reveal that their member letting agents are so far unaware of any increase in "New Europeans" looking to rent property. However, we warn landlords, especially novice buy to let investors to be very particular in their approach to references.
"It is not a reflection on the individual, but some countries have a less sophisticated approach to credit referencing and personal references can be difficult to obtain. A further problem with the lack of substantive references is that it may be difficult to get rental guarantee or legal expenses cover.
“Whether a prospective tenant is domestic or comes from overseas, we would always caution landlords to be certain of the validity of references. It is one of the many areas where it pays to use qualified, regulated ARLA member agents."
On the flipside, Peter Bolton King, Chief Executive of National Association for Estate Agents believes the EU expansion will pave the way for property investors to make purchases further afield.
“There is no doubt that the British continue to show considerable interest in owning property abroad mainly as second homes but also for retirement.
“Some 1.2 million own properties in Spain and France with considerable interest continuing to be shown in places such as Florida, Greece and Italy.
“We anticipate, as the EU enlarges, that over the next 10 years, we will also see an increase of second homes in Eastern Europe. Many areas offer superb value for money and this is bound to attract interest. It will however be important for people to look into this very carefully especially with the very different legal systems. Professional advice is essential.”
