Melton Mowbray house prices since the Millennium have risen by 128.12%,
whilst average salaries in Melton Mowbray have only grown by 51.27% over the
same time frame. This has served to push homeownership further out of reach for
many Melton Mowbray people as they have to battle against raising considerable deposits and meet sterner
lending criteria, as a result of new mortgage regulations introduced in 2014/5.
The private rental market in Melton Mowbray has
grown throughout the last twenty years with buy-to-let investors purchasing a
high proportion of newly built residential properties that were built and
designed for the owner occupier sales markets.
For example, in the Rutland
and Melton Constituency, roll the clock back 20 years and there were 35,421
properties in the Constituency, whilst the most recent set of figures show there
are 41,882 properties - a growth of 6,461 properties.
Nevertheless, some say this historic growth of the Melton Mowbray rental
market might start to change with the new tax rules for landlords introduced by
Mr. Osborne over the last seven or eight months.
Yet the numbers tell another
story. Across the board, mortgage borrowing climbed to a 9 year high in March this year as the
British property markets traditional Easter rush corresponded with landlords
hurrying to beat George Osborne’s new stamp duty changes – buy-to-let landlords
borrowed £7.1bn in March 2016 (the latest set of figures released) which was
163% up on the £2.7bn borrowed in the previous March.
You see,
from my point of view, I don’t think things will get worse in the buy-to-let market
in Melton Mowbray and these are the reasons why I believe that:
Firstly, what else are Melton Mowbray landlords going
to invest in if it isn’t property - the stock market? Since the Millennium, the stock market has risen by an
unimpressive total of 5.54%, quite different to the 128.12% rise in Melton
Mowbray property prices?
Secondly, its true the 3% stamp duty is the first blow on top of a number of other tax changes to be phased
in between 2017 and 2021. If sizeable numbers of landlords do take the decision
to sell their portfolios, this will lead to a substantial amount of second hand
properties being put up for sale. That might not be a bad thing, as I have mentioned
in previous articles there is a serous shortage of properties to buy at the moment
in Melton Mowbray: the stock of property for sale being at a six year all time
low.
.. Thirdly, if there are fewer rental properties, as supply
drops and demand remains the same, (although ask any letting agent in Melton
Mowbray and they will say demand is constantly rising) this will create a
squeeze in the Melton Mowbray rental market and as a result rents will rise. In
fact, I predict even if landlords don’t sell up, rents will rise as Melton
Mowbray landlords seek to compensate for increased costs, which means more
landlords will be attracted back.
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