Back in the Spring, there was a surge in
Loughborough landlords buying buy to let property in Loughborough as they tried
to beat George Osborne’s new stamp duty changes which kicked in on the 1st April 2016. To give you an
idea of the sort of numbers we are talking about, below are the property
statistics for sales either side of the deadline in LE11.
Jan 2016 – 56 properties sold
Feb 2016 – 70 properties sold
March 2016 – 107 properties sold
April 2016 – 39 properties sold
May 2016 – 41 properties sold
Normally, the number of sales in the
Spring months is very similar, irrespective of the month. However, as one can
see, this year was a completely different picture as landlords moved their
purchases forward to beat the stamp duty increase. You would think that even
with a basic knowledge of supply and demand economics, rents would be affected
in a downwards direction?
However, there appears to be no apparent effect on the levels of rent
being asked in Loughborough - and more importantly achieved - and this direction of rents is not
likely to inverse any time soon, particularly as legislation planned for 2017 might
reduce rental stock and push property values ever upward. The decline of buy to
let mortgage interest tax relief will make some properties lossmaking, forcing landlords
to pass on costs to tenants in the form of higher rents just to stay afloat.
Even those who can still operate may be deterred from making further
investments, reducing rental stock at a time of severe property shortage.
.. but it’s not all bad news for
tenants. Whilst average rents in Loughborough since 2005 have increased by 14.5%,
inflation has been 38.5% over the same time frame, meaning Loughborough tenants
are 24% better off in real terms when it comes to their rent (which is a
sizeable chunk of most people’s monthly household budgets)
Year
|
Average Rent in Loughborough per month
|
2005
|
540
|
2006
|
551
|
2007
|
563
|
2008
|
575
|
2009
|
574
|
2010
|
569
|
2011
|
574
|
2012
|
583
|
2013
|
589
|
2014
|
595
|
2015
|
605
|
2016
|
618
|
I found it particularly interesting looking
at the rent rises over the last five years in Loughborough, as it was five
years ago we started to see the very early green shoots of growth of the Loughborough
economy. As a whole, following the
Credit crunch (2011), rents in Loughborough have risen by an average of 1.6% a
year – fascinating don’t you think?
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