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 Melton Mowbray 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 72% in Melton Mowbray) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in Melton Mowbray it stands at 13.2% today).
Therefore, the demand for rental accommodation in Melton Mowbray will grow by 314 households in the next five years ... and these are the reasons why, irrespective of the distractions set out in the newspapers.
Melton Mowbray property values over the last six years have risen a lot more than average wages/salaries, meaning as homeownership and mortgage availability is dependent on your ability to pay has served to push home ownership further out of reach for many, 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 that the Government’s efforts to fix the deficiency of affordable housing has focused on those who want to buy a home, ranging from Help to Buy and Starter Home Schemes, an initiative offering a 20% discount for first time buyers … but if you are unable to save for the deposit ... none of this means anything to the ‘20 something’s’ of Melton Mowbray ... and they still need a roof over their heads!