After the shock of the Conservatives returning to power with a majority at Westminster, all the potential issues and possible uncertainties of a hung parliament has lifted the cloud from the Melton property market. Talking to other Melton agents, surveyors and solicitors in the area, there are signs this has started a new impetus the Melton property market. This is only after a subdued six months, when an amalgamation of tougher lending conditions, a natural correction after the strong recovery in Melton property prices in 2014, and political uncertainty ahead of the General Election slowed demand.
Against the back drop of Labour’s election promises of rent controls and three year tenancies, some Melton buy to let landlords were waiting to see how these new policies would be implemented before they committed themselves to buying more property for their buy to let portfolio. Now that uncertainty has been removed, the long term picture is very positive.
So, with all that uncertainty now removed, where next for the Melton property market? Well with inflation at zero and with the Money markets happy David Cameron is still at No.10, the Bank of England have no reason to raise interest rates until 2016 at the earliest. As mortgage rates are at their lowest levels since 2010, landlords with large deposits will now be wooed by the mortgage companies in the coming months with low rates.
You see over the past couple of years, Melton and Rutland landlords have benefitted from a booming local job market. Unemployment in the town and immediate area has dropped to 1.1%, as a year ago, 816 people were claiming unemployment benefit compared to today’s 547. With more jobs and better pay, as the level of rents is directly linked to tenant’s wages (see article Rents paid by tenants in Melton Mowbray on the rise from the 23/4/15), there has been an increase in the rental prices tenants are willing to pay for good quality Melton properties.
Some landlords might be nervous about the Conservative’s plans for the housing market in the next five years in terms of tenant demand for their rental properties. One plan is for Housing Association tenants to have the right to buy their property. These kind of tenants were never in the private rented sector and will actually increase the supply of properties in the housing stock in decades to come. The Government ‘Help to Buy Scheme’ has only helped to buy 100 Melton and Rutland properties since April 2013. Considering 1,202 properties have changed hands in the last year alone in Melton and Rutland, I don’t think it has made a huge difference to our local property market.
The biggest matter, when it comes to tenant demand for rental property going forward, comes from the shift in the mindset and attitudes towards renting itself. Twenty years ago you were seen as a second class citizen if you rented a property. In Melton, as in the rest of the UK (apart from Central London), renting continues to offer good value for money for tenants.
If you are an existing landlord in Melton or thinking of becoming one, then I must suggest you out seek specialist advice and opinion. Like many agents in Melton, we will happily give you our opinion on the current state of the market and the advantages/disadvantages to investing in the Melton property market if you pop into our offices or call me on 01664 569700.