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.
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