A reduction in the price of borrowing could assist many of those who are looking to buy. As I discussed in a previous article the long term gains of investing in property far exceed those seen in stocks and shares and what you can hope to achieve in savings accounts.
If borrowing becomes cheaper for the next few years then there may be more people looking to invest in property and rents are on the increase all over the UK as demand from tenants continues to outstrip supply.
Experts say housing should cost no more than 30% of take home pay. Rental costs In the East Midlands are more reasonable compared to the South East of England and as the unemployment levels are lower than the national average the East Midlands will continues to provide a good standard of living for professionals. A recent BBC investigation looked at the cost of renting in the UK and I wondered how Melton Mowbray stacked up -
Looking at two bed properties in Melton Mowbray area using the calculator on the BBC news website for a single person - In Melton the median annual gross salary is £25,563, leaving £1,713 a month after tax and National Insurance contributions. Experts recommend spending no more than 30% of this on housing, which would be £514.
An average two-bedroom home is about £524.
Many two bedroom properties will have two wage earners and the East Midlands compares favourably when compared to many areas of the UK.
Rents are on the increase due to the demand from tenants there would have to be a substantial number of new investment properties purchased to buck this trend. I am finding it harder and harder to identify good properties to blog about.
With the numbers of properties on the market for sale much lower than we have seen over the last few years I wonder if is this going to push up the price of the first time buyers properties as these are often also the target of the Buy to let investor.
Looking at LE13 and LE14 there are currently 360 properties being advertised for sale on Rightmove and in the summer of 2015 it was listing 410 for sale and in the summer of 2014 it was over 500 properties for sale. There are still around 50 new properties coming to the market each month, which has remained quite constant over the years, so I can only imagine these are currently selling quickly if there is not a build up of available property.
Whilst tenant demand remains high and the supply of rental properties stays low the rents will continue to increase for tenants in Melton Mowbray.