Wednesday, 17 January 2018

My thoughts on the future of the Loughborough Buy-To-Let Market



I was recently reading a report by the Home website which suggested that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the market nationally (for sale) jumped by 11% across the UK as a result.

Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster wants to heighten standards in the Private Rented Sector. 

Some self-managed landlords may not realise the other recent legislations that have hit the Private Rented sector, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).

If you are a self-managed landlord though, the consequences are severe because if you let a property to a tenant who is living in the UK illegally, you may be fined up to £3,000. I am happy to offer to check the paperwork for any landlord in the Loughborough area if you want me to cast my eye over your buy to let matters and ensure you are on the right side of the law (and at no cost – ok just bring in some chocolates for the girls in the office!)

But what of all these extra properties being dumped onto the market in Loughborough? When I looked at the records the number of properties on the market in Loughborough now, as opposed to a year ago, the numbers tell an interesting story …





1st Jan 2017
1st Jan 2018

Detached
106
103
-3%
Semi
72
78
8%
Terraced
61
65
7%
Flat
60
65
8%
Plots +
Other
44
30
-32%
Total
343
341
-1%







Overall, Loughborough doesn’t match the national trend, with the number of properties on the market actually dropping by 1% in the last year.  It was particularly interesting to see the number of flats increase by 8%, yet the number of detached on the market drop by 3%.

However, speaking with my team and other property professionals in the town, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will write about soon in my Loughborough Property Market blog later this Spring?). You see, for the last ten years, each month there has always been a small number of Loughborough landlords who have been releasing their monies from their Loughborough buy to let properties - as is the nature of all investments!

Nationally, the number of rental properties coming on to the market to rent fell by 16% in Q4 2017 compared to Q4 2016 .. but that isn’t because there are 16% less rental properties to rent – it’s because tenants are staying in their rental properties longer meaning less are coming on the market to be RE-LET.

Nevertheless, some Loughborough landlords will want to release the equity held in their Loughborough buy to let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks the tenants to hand in their notice days after you put it on the market (because they don’t like the uncertainty and also believe they will become homeless!). This means you have an empty property, costing you money with no rent coming in.  However, some letting agents who specialise in portfolio management have select lists of landlords that will buy with sitting tenants in. If you have a portfolio in the Loughborough area and are considering selling some or all of them – drop me a line as I might have a portfolio landlord for you (with the peace of mind that you won’t have any rental voids).



If you would like to discuss the Loughborough property market or chat about any potential investment please feel free to call us on 01509 260777 or email me james.loughborough@belvoir.co.uk

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