Lender representatives Brexit warning over right to buy changes

Potential changes from the fallout of Brexit including rental caps and the introduction of a ‘Right to Buy’ for private tenants could be devastating, according to specialist lender representatives speaking at an event in Coventry.

While this was the view of those quizzed about how the UK’s exit from the EU could affect the sector, the panel also said that Brexit shouldn’t have a major impact on the private rental sector (PRS).

Fleet Mortgages distribution director, Steve Cox, said: “Whatever happens regarding Brexit, the PRS will survive.”

Cox was also asked how some of the recent policy proposals from the Labour Party might land on the sector, in particular a cap on rents, and about the introduction of a policy which would see existing tenants given the right to purchase their home from landlords, potentially at a discounted price.

He answered: “That would have a sizeable impact, especially the ‘Right to Buy’. I do, however, think it’s unlikely to happen because you would have to legislate that someone’s privately-owned asset can be sold at a discount. That principle simply doesn’t sound right, plus of course social housing can’t be created overnight to replace the PRS. The threat is there, but in my view it won’t happen.”

Members of the panel also suggested that resolving Brexit in any way might unleash a significant amount of pent-up demand into the mortgage market, with potential purchasers and sellers currently waiting for an outcome to the current political situation before acting.

Sales director at OneSavings Bank, Adrian Moloney, agreed that the current political stalemate was having a considerable impact. “Brexit has stopped people from doing things,” he commented. “They won’t make a decision until they know what’s going to happen. In that sense, resolving Brexit might be seen as an opportunity for mortgage intermediaries.”

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