Even with the General Election on the horizon, property
values in Melton Mowbray are only 0.36% lower than they were 3 months ago, the diversion and ambiguity of an election
typically makes house sellers who need to sell, price their property more realistically
(although this only lasts a couple of months).
Looking
specifically at it from a Melton Mowbray landlord’s point of view, the Melton
Mowbray properties favoured by investors are in short supply in many parts of
the town because of a number of factors. One of the factors has been that we
seen the number of first time buyers increase over the last 12 months in Melton Mowbray. Another factor has been the fact that the
banks have been pushing ‘let to buy’ (yes ‘let to buy’ is different to ’buy to
let’) to homeowners (more of ‘let to buy’ in an up and coming article).
Next, because of the banks, who are chasing low risk landlords with high
deposits with very low mortgage rates- and the low risk landlords with high
deposits tend to be attracted to the safer modern two and three bed town houses
and semis in Melton Mowbray.
As I mentioned a few weeks back, the pension rules are changing which
means buy to let landlords can use some, or all, of their pension pot to buy a
property. It shouldn’t be forgotten
there are tax implications taking more than a quarter of your pension pot out
(see the article from a couple of weeks ago) , so whilst many pension pots may
not be able fund a suitably big enough tax free lump sum to buy the property
outright, for most it will provide enough for the 25% deposit (required by most
BTL mortgage providers). Remember though the interest paid on the mortgage is
tax deductible against the rent, thus lowering your income tax paid.
In the last 12 months, I have noticed a particular uplift in interest from ‘50
something’ Melton Mowbray people wanting to become landlords for the first
time. In Melton Mowbray, the highest returns for the lowest investment are at
the lower end of the market eg the classic 3 bed semi . Unfortunately 3 bed
semis are coming to the market in smaller numbers than the larger four bed’s.
When looking at the actual numbers, in the
later part of the Summer of 2014 in Melton Mowbray, in one month alone 95 three
bed properties were on the market in Melton Mowbray. However, in January this
year, a notoriously excellent bumper month for properties coming on to the
market, there were only 70 three bed properties on the market in Melton Mowbray
to choose from. Today, that figure stands at only 61 ..whilst the number of
four and five beds has increased significantly ... interesting don’t you think?
At that lower end of the property market in Melton Mowbray, (ie
where first time buyers and landlord investors compete with each other to buy
those smaller properties), I believe throughout 2015, there will be a slow and
steady tipping of the scales between supply and demand. In fact, from what I am
seeing and hearing, early anecdotal evidence has suggested over the last few
months (although we will need to look at figures later in the Spring once we
have the data from The Land Registry), we are beginning to see a polarised Melton
Mowbray property market. We have high demand but low supply at the bottom end
of the property market, yet high supply but lower demand at the top of market
.. and that can only mean one thing ... prices will go up quicker on the
smaller properties than the larger ones in Melton Mowbray, thus narrowing the
gap for people looking to move up market!
If you want a chat about the local Melton Mowbray property
market, pop in for a coffee or email me on charlotte.baker@belvoirlettings.com
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