You find me in a
reflective mood today as I want to talk about the future of investing in
property in Stamford.
The truth is that we have
got languid and lethargic, with many people having mistaken the ever rising
Stamford property market (and in fact the whole of the UK) since the 1960’s as
the eternal gift that kept giving as property prices constantly rose and
doubled every 5 to 7 years.
The days of making money from property
'as easy as falling off a log' are sadly over my Stamford Property Blog reading
friends.
Whilst George Osborne has
decided now is the time to milk the ‘Golden Cow’ of UK’s private landlords, with
changes in taxation for buy-to-let property, many pundits are predicting the
end of buy-to-let as we know it.
However, it is still
possible to make a reasonable, profitable and safe return on property with
these changes. You could see investing in the buy-to-let market as you might see
‘mother nature’, creating some truly wonderful stunning warm weather but at the
same time, she will bite, creating catastrophic situations such as snowstorms
and hurricanes.
You need to study the
market, take advice and opinions from many people and then decide what the
proverbial property weather will be … remember, tenants will always want a roof
over their head and I don’t see HM Government building the millions of houses
required to house them.
Nobody knows the future,
and yes people can make predictions, but I wouldn’t be afraid of this change because
as a translated French proverb says, (I told you I was a reflective mood
today), ‘the more things change, the more they stay the same’. I mean, no one could have predicted how the
property market has changed in Stamford over the last couple of decades?
20 years ago, 4,892
households (64.17%) were owner occupied and only 539 households (7.48%) were
privately rented. Fast forward 20 years
and the change shows that 5,881 properties in the town are owner occupied (a
slight rise to 65.38%) and the jump in private renting has increased to 1,497
properties (proportionally 16.6%). NB neighbouring towns show similar changes
as well.
Who would have predicted in 1995 the
private rental sector in Stamford would have grown by 121.92% in the proceeding
20 years?
Also, if you had asked
someone in 1995 to predict what would happen to property values over the
proceeding 20 years (i.e. 1995 - 2015), they might have predicted
similar growth to the growth experienced over the previous 20 years (i.e.
between 1975 - 1995), which was a very impressive 351.55%. Yes, property values
in Stamford have increased over the last 20 years (1995 - 2015), but by a more
modest 140.7% (and most of that can be attributed to house price growth between
2000 - 2006.)
The property market is
constantly changing and buy-to-let for too long has been heavily dependent
solely on house price growth, where yield has been almost forgotten.
I see the changes in tax
and landlord and tenant law in a different perspective to the ‘doom-mongers’
and see it as bringing many opportunities.
You might need to change
your buy-to-let benchmarks, your approach to financing or even consider places
other than Stamford in which to invest your money, but this will shine a light
on investing in properties with healthier yields and create more realistic long
term buy-to-let opportunities, instead of short term growth bets and wagers.
The
advice I give to my landlords, and you my blog reading friends is this; these
changes will make some landlords panic, meaning competition for decent Stamford
buy-to-let bargains will reduce as fear of change kicks in and amateur
investors flee the market.
These
opportunities will provide a more stable platform for knowledgeable and wise
Stamford buy-to-let landlords to thrive in.
If
you want to learn more about the Stamford Property Market, feel free to pop in
for a coffee at our office for a chat with me, or failing that, visit our archive of properties within this blog.
