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How Will a No Deal Brexit Affect the Private Rental Sector?

Brexit to affect the private rental sector?

As parliament remains deadlocked over the best way forward for the UK’s exit from the European Union, the prospect of a no deal Brexit looms closer. New Prime Minister Boris Johnson has made it clear that, if there is no refreshed agreement between Britain and the EU before the deadline of 31st October, he has no qualms about leaving on World Trade Organisation terms. But how would this affect the private rental sector?

Many experts believe the UK economy will dip following this outcome, but no one knows for how long the effects will be felt. In addition, the slowing of the economy might not necessarily be a bad thing for landlords and lettings agents. Read on to find out more details about the effect of a no deal Brexit on the lettings market.

Fewer Sales, More Private Renting?

Many areas of the country have seen sales slow down as prospective buyers and sellers keep a keen eye on developments at Westminster and in Brussels. This lack of activity is not great if you make your money from facilitating house sales, but for lettings agents and landlords, there may be grounds for optimism.

Rather than jumping onto the property ladder, prospective first time buyers might be looking to rent until the fallout from a no deal Brexit becomes more clear. Similarly, many people who have sold might choose to hold fire from buying their next property and lay low in rented accommodation before planning their next purchase. If, as some predict, there is a fall in house prices post-no deal Brexit, this could be a savvy move that suits both the seller and the landlord whose property is occupied for the next few months.

Furthermore, a house price crash might send some homeowners into negative equity, making it uneconomical to sell their home. With more people demanding rental properties and fewer houses for sale, rents might even rise as an unexpectedly positive by-product of the looming no deal Brexit.

Oversupply of Rental Properties?

Whereas that seems like the ideal outcome for the private rental sector, there is a note of caution too. A no deal Brexit means there may be little clarity for EU citizens already living in the UK. If the outcome of Brexit is that there is a surge of workers moving back to the continent because they can’t secure the relevant paperwork to stay, that could have the opposite effect and create an oversupply of rental properties, pushing rents downwards. As with most things Brexit, the future remains unclear.

Private Rental Sector Regulation

Legally, there may not be too much that changes to the private rental sector. The Housing Act 1988 will remain as it is and, as per the Withdrawal Act 2018, any European law that we adhered to as a member of the EU that wasn’t already designated so, is now signed into UK law as well.

This means you will still need to supply Energy Performance Certificates and adhere to consumer protection rules on unfair trading. In addition, the data protection legislation as part of GDPR will remain in place for landlords and lettings agents. However, how that will work given that it is a European-run initiative remains to be seen.

No deal Brexit does not affect any of these rules and laws, as they are now all considered British legislation.

Right to Rent Confusion

One piece of legislation that is already causing issues, though, is Right to Rent. And a no deal Brexit might make that even worse. There have been reports that many landlords are refusing to rent properties to EU nationals because they are worried that they will unwillingly contravene the Right to Rent rules. It was implemented in 2015 to prosecute landlords who let properties to people they know or should know have no right to rent in the UK.

The problem is that no one really knows which EU nationals will have the right to rent come the 1st November and a no deal Brexit makes that even less clear. Landlords do not want to suddenly find themselves breaking the law on the stroke of midnight when the UK leaves the EU.

Landlords are expected to check the visa status of each tenant and can be ordered to pay £3,000 for each non-eligible tenant. Landlords and letting agents who have diligently checked the status of their tenants on signing the agreement could find that the status changes as soon as Brexit happens.


For the private rental sector, these are worrying times. No one seems to know exactly what will happen when we leave the EU. The negotiations could run on until the 31st October, so we have to prepare for all eventualities. But it does seem that a no deal Brexit is on the cards. Hopefully the government, as part of its contingency planning, will be able to set the record straight sooner rather than later over a number of outstanding issues that could help steady the market.

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