The next 5 years will see an interesting change
in the Rutland and Stamford property market.
My recent research has concluded that the rent
private tenants pay will rise faster than property prices, creating further issues
to the growing multitude of renters in our area. In fact, my examination of statistics forecasts
that…
By 2022, Stamford rents
will increase by 23%, whereas Stamford property values will only grow by 17%.
Over the last 5 years, property values in Stamford
have risen by 22.6%, whilst rents have only risen by 9.9%.
Throughout the last few years, and compounded
in 2016, tenant demand for rental properties continued to rise whilst the press
predicted some landlords might sell and reduce their portfolios, creating less
choice and pushing rents higher.
In
fact, talking to fellow property professionals in Stamford, there appears to be
deprivation and shortage of new rental properties coming on to the lettings
market.
Landlords have some intriguing challenges ahead
of them in the coming years, most notably in that the Tories have changed the taxation
rules for landlords in the way buy-to-let properties are to be taxed. On top of that, there is the ban on letting
agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish
letting agents passed on those fees to their landlords, who in turn increased
the rent they charged to their tenants. (For more on this topic, see my previous article: 'What does the tenant fee banning order mean?' http://rutland-stamford-property.blogspot.co.uk/2016/12/what-does-tenant-fee-banning-order-mean.html )
All I would say to Theresa May and Philip
Hammond is that they must be wary about indicating both red and green lights at
the same time to the private rented sector. They can’t expect the armies of small private
landlords to continue to house around a fifth of the population and then tax
the hell out of them. They didn’t invest
in buy-to-let as a charity or to satisfy any philanthropic urges. Something has to give – and that will be
significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords …
if it wasn’t for landlords buying all these buy-to-let properties over the last
15 years, I am not sure where everyone would be living today – because most of the
council houses were sold off in the 1980’s).
With the challenges ahead (including the
budget), house price inflation will be tempered over the coming 5 years. The number of properties on Stamford’s
property market remains close to historic lows, which is both good and bad; it
keeps houses prices relatively stable, and yet it impedes choice for buyers…
and hence why I believe property values in Stamford will only be 17% higher in 5
years’ time.
In addition, the significant shortage of new homes being built adds further pressure as people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses (because they have no money), with the average rent for a Stamford rental property currently standing at £749 per month, over the next 5 years, I predict the average rent in Stamford will rise to £921pcm.
These are interesting times. There is still money to be made in buy-to-let in Stamford and Rutland, but landlords will just need to be smarter and savvier with their investments.
If you are looking for such advice and opinion to help you meet those investment goals, please pick up the phone and call me. I don't bite and I'm here to help.
David Crooke - 01780 484 554
david@upp-property.co.uk
Owner and managing director
Understanding People & Property
SALES & LETTING AGENTS
Stamford: 01780 484 554
Rutland: 01572 725 825
