In our previous article, we looked at Brexit from the point of view of healthcare accounting, but it is also important to consider the impact of the EU Referendum on the work done by our property accountants – and for anyone with an existing rental property portfolio, the prospects are quite good.
According to figures from Yorkshire Building Society, the UK has failed to meet its housebuilding target in any year since 2004, although it came closest in the years leading up to the 2007 financial crisis.
Since the recession, housebuilding has come in significantly below target, leading to a shortfall of 1.2 million properties between what was predicted to be needed to support affordable housing in the UK, and the number of new homes that were actually built over the past decade or so.
The building society suggests that the uncertainty caused by the Brexit vote may mean several more years of subdued housebuilding activity – leading to inflated property prices and severe difficulties for anyone trying to take their first steps on to the housing ladder.
A likely consequence of this is that more people will be renting for longer, which is welcome news for landlords with existing rental property portfolios, which were perhaps bought when property prices were lower and demand not so great.
It is important to recognise the flipside of this, as any large increase in house prices could lead to a sizeable property tax bill, either in terms of stamp duty or capital gains tax, when you decide to sell your portfolio.
Whatever happens in the coming years – and it is worth remembering the Brexit process should take at least two years at a minimum – our property accountants will be available to help landlords understand their exposure to the changing market.
This includes the direct impact of changes in property valuations, as well as any legislative changes that could affect the property tax you pay when you buy or sell rental property.