There I was, out with the family at Burghley
House last weekend, when a smart gentleman approached me. “Hello”, he said, “You’re
the writer of the Stamford Property Blog aren’t you? We met at the local Business
Networking event in Stamford a few months ago”.
I then recognised him and,
whilst I won’t mention his name, he runs a small but perfectly formed and well-known
independent retailers in the town ... It’s amazing who you see when out walking!
Anyway, whilst the other half was sorting out things with the family and the
dog, we seized the opportunity for a chat.
He wanted to know my thoughts on the future
of the Stamford property market, and I would now like to share with you that
conversation…
People are always going to need a roof over their heads – it’s a
necessity for every single person. The 22-30 year olds of the town have a
choice to what type of roof they have; they can rent from the local council,
they can rent from a private landlord or finally they can get a mortgage and
buy their own home. In the 1970’s/80’s and 90’s, the expected thing was to save
like mad for a few years for the deposit (going without luxuries) whilst living
at home, or rent a cheap terraced home for a few more years and then go on to buy
their first house.
However, more recently fewer Stamford youngsters have been
buying, choosing to rent instead – mainly from private landlords (as councils
have been selling off council housing on the ‘Right to Buy’ Schemes).
Twenty years ago Stamford was a different place. There were 7,623
households in Stamford and 4,892 of those were ‘owner occupied’. Move to the
present day, and with all the building in the town, the total number of
households has increased by 17.9% to 8,994 and quite surprisingly (to me at
least), the number of owner-occupiers has increased to 5,881 (although as a
proportion, it is only 65.3% compared to 64.1% twenty years ago).
However, it’s the rented sector
that is truly fascinating. Twenty years
ago, only 539 properties were privately rented in Stamford, and now there are 1,497,
a rise of 958.
The twenty-somethings’ housing
difficulties haven’t been helped by the local authority selling off council
housing, with the number of council houses dropping from 1,534 to 1,170 over
the same twenty year period.
Demand for decent
rented property remains high, as Cameron’s much vaunted house building program
is years away and has decades of under investment to catch up on before it
starts to affect demand.
Even with the Buy-to-Let tax rule changes over the coming few
years (which will see the maximum tax relief available to landlords drop from
45% to 20%), private landlords still have an important role to play in housing Stamford
residents and those landlords who educate themselves and treat it as a business
will survive and prosper.
The best way Stamford landlords can protect their income from
property (and mitigate the effects of the tax rises) is to keep the homes they
let out in ‘Grade A’ condition. I have found, especially over the last 3 or 4
years, Stamford tenants have ever growing demands from their rental property,
but many are prepared to pay ‘top dollar’ for houses and apartments that meet
their increasingly high expectations.
You must not forget, letting property is a business, so all
private landlords should also seek the advice, opinion and commentary of
property professionals who are talking to prospective tenants on an hourly basis, and who can share their
valuable feedback before costly errors are made.
And just as the other half had sorted
the family, my smart retailer friend asked “What about the Stamp Duty changes for
Landlords coming in April”? My thoughts are that with such
low supply (i.e. numbers of property for sale), and high demand it is hard to
imagine Stamford property values will see much impact – but I predict, ever so
slightly, the proportion of owner occupiers should increase slightly compared
to ‘buy-to-let’ landlords in the coming decade and the housing market should
return to balance.
For more in-depth thoughts on our local property market, please
look at the archive library of articles on this blog.
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