Whether you are
a landlord of mine (or not as the case maybe), I am always happy to look over
any properties you are thinking of buying for buy-to-let purposes, and more so
over a coffee!
Some
commentators are saying buy-to-let is about to die, with the new stamp duty
changes and how mortgage tax relief will be calculated. Some say 500,000 rental properties will flood
the market nationally in the next 12 months as landlords leave the rental
market.
Have you heard
the phrase ‘Bad News Sells Newspapers’? Let me explain why buy-to-let in Stamford
is only going in one direction – and not the direction the papers say they are
going.
According to Sheffield
University, buy-to-let landlords will continue fuelling the growth of the
private rented sector in the coming decades. By their estimates (and they are
considered a centre of excellence on the topic), the rate of homeownership nationally
will fall to 50% (today it is 66.3% in Stamford) by 2032, while the rate of
private sector renting will increase to 35% (interestingly, in Stamford it
stands at 16.6% today).
Therefore, the demand for
rental accommodation in Stamford will grow by 307 households in the next five
years ... and these are the reasons why, irrespective of the distractions set
out in the newspapers:-
Stamford property values over the last six years have risen a lot more than average wages/salaries, and as homeownership and mortgage availability is dependent on your ability to pay, this has served to push home ownership further out of reach for many, and at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households - a drop of 31.1%).
Now it’s true the
Tory’s efforts to fix the deficiency of affordable housing have focused on
those who want to buy a home, ranging from ‘Help to Buy’ and their much vaunted
‘Help to Buy ISA’, and ‘Starter Homes Scheme’ - an initiative offering a 20%
discount for first time buyers. However,
if you are unable to save for the deposit, none of this means anything to the ‘20 something’s’ of Stamford - and they
still need a roof over their heads!
Currently, 3,070 people live in private rented
accommodation in Stamford
Stamford and its
surrounding area still offers the prospect of strong economic growth forecasts
and has a reputation as a lively and desirable place to live, and with the new
rules on tax, more and more landlords will be looking to move away from the
previous honeypot of central London, because its higher prices meant lower
rental yields.
So, by 2021, the number of rental properties in Stamford
will rise to 2,111
This prediction in
growth of the Stamford rental market is even on the back of the government clamping
down on tax reliefs for landlords.
Gone are the days of
making guaranteed returns on BTL property. For the last 20 to 30 years,
irrespective of which property you bought, making decent money on buy-to-let
property was like ‘shooting fish in a barrel’ – anyone could do it. But not now. You must take a more considered
approach to your existing and future portfolio, especially in Stamford.
The balance of
capital growth and yield, especially in this low interest rate world we live in,
means Stamford landlords need to do more homework to ensure the investment in
property gives the desired returns.
One place for Stamford
landlords and homeowners to visit for such information is the Stamford Property
Market Blog. www.rutlandandstamfordpropertyblog.co.uk
If you have any questions regarding an existing investment property you own, or if you are keen to find out the current market value of your property, please contact me and I would be glad to discuss it together with you.
Data: Office of National
Statistics, Census, Sheffield University
Good to see this prediction of generation rent posting within your sharing. Thank you very much. Very informative. Budget house in coimbatore | Budget villas in coimbatore
ReplyDelete