April Fools Day was no joke for some landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% stamp duty imposed on buy to let properties after the 31st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Melton Mowbray, all of us have noticed, since the clocks went forward, demand to buy in April and May from these landlords has eased.
Then we have the Brexit issue, which is also having a tempering effect on the Melton Mowbray property market – although if you recall I wrote about this a few weeks ago, and whilst an exit will have an effect – it won’t be the end of the world scenario some commentators are suggesting. The growth rate of Melton Mowbray property values is slowing, but they are still 4.1% higher year on year, albeit the growth rate month on month has started to moderate when compared to the heady days of month on month rises of 2014 and 2015.
All over the UK, this had led to increase in the number of properties for sale by 20% to 40%, but not in Melton Mowbray. For example, in the LE13 postcode, which covers all of the town, there were 151 properties for sale in the postcode in December (of which 42 came on to the market for the first time). In January, February and March, 134 properties came onto the market in the postcode district (or an average of 44 per month), meaning by end of the first Quarter, there were 144 properties available for homeowners and landlords alike to buy in LE13 (i.e. a drop of 4.6% properties for sale). These figures are mirrored in neighbouring postcode of LE14.
Nevertheless, I am starting to see signs of easing in the Melton Mowbray property market, which to be honest, is a good thing, as investment landlords wont have to pay top price to secure a property because of the lower competition.
On the face of it, this easing should be bad news for the 19,584 Melton Mowbray homeowners, but nothing could be further from the truth. The majority of homeowners that move, move up market, (i.e. from a flat to terrace/town house, then a semi and then detached), so whilst last year you would have achieved a top dollar figure for your property, you would would have had to have paid an even higher price to secure the one you wanted to buy. The Swings and Roundabouts of the Melton Mowbray Property Market!
However, all the signals suggest that whatever the aftermath of the approaching EU referendum, in the long term, the disparity between demand for Melton Mowbray property and the supply (i.e. the number of actual properties) will still exercise a sturdy and definitive influence on the Melton Mowbray property market. It would surprise me that if by 2021, whichever way we vote in late June, assuming we don’t have another credit crunch or issues like a major world conflict, property prices will be between 20% to 23% higher than they are today.
If you are considering investing in property please give me a call for honest opinion on potential rental returns.