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.