George Osborne has
decided now is the time to change 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 need to study the
market, take advice and opinions from many people and then decide what the best
course of action should be… remember, tenants will always want a roof over
their head and I don’t see the HM Government building the millions of houses
required to house them?
Looking specifically at
the Rutland and Melton Parliamentary Constituency, twenty years ago, 24,218
households (meaning 68.37% of property) was owned and only 2,513 households
were privately rented (meaning 7.09% of property was rented out by private
landlords). Roll the clocks on twenty years and 30,376 of properties in the
Constituency are home-owners (72.52% being owner occupied) and the jump in
private renting has high, as 5,968 properties are now privately rented
proportionally 14.24%). (NB Neighbouring Constituencies show similar changes as
well).
Who would have predicted in 1995 the
private rental sector in
Melton Mowbray would have grown by
100.84% 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 (ie between 1995 and 2015), they might have
predicted similar growth to the growth experienced over the previous 20 years (ie
between 1975 and 1995), which was a very impressive 351.55%. Yes, property
values in Melton Mowbray have increased over the last 20 years (between 1995
and 2015), but by a more modest 163.29% (and most of that can be attributed to
house price growth between 2000 and 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 Melton Mowbray 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 is these changes will make some landlords panic,
meaning competition for decent Melton Mowbray buy to let bargains will reduce
as fear of change kicks in and amateur investors leave the market. These
opportunities will provide a more stable platform for knowledgeable and wise
Melton Mowbray buy to let landlords to thrive in.
If you want to learn more
about the Melton Mowbray Property Market, feel free to pop in for a coffee at
our office for a chat with me at 27 Burton Street.
No comments:
Post a Comment