Last week I was chatting to a landlord in Droylsden whilst carrying out an evaluation on one of his properties; he’d recently seen my post on the terraced property market pre and post credit crunch and wanted to know my thoughts on the future of the area’s Buy to Let market. Now I’m by no means a time traveller or weather forecaster, but stay with me on this.
Droylsden has been doing pleasantly well across the board when it comes to property; 289 properties have been sold in the area over the past 12 months and the average value has increased by 4.5%. In a recent report by Home however, it suggested that landlords are increasingly selling their buy-to-let investments due to the increasing burdens for those who self manage their properties, as well as the portfolio of changes that are set to be implemented over the coming months.
The new tax rules that are set to be introduced over the next four years, alongside all self-managing landlords needing to register with a compulsory redress scheme, are attempts to heighten the standards in the Private Rented sector; but are already causing landlords headaches.
Prior to the evaluation in Droylsden, a good friend of mine who is a self-managed landlord of two properties in the borough, came into my office to check that all his paperwork was in order. He was unfamiliar with not all, but some of the more recent changes such as the ‘Right to Rent’ regulations which were implemented last year. These regulations mean Landlords must be able to certify their tenants have a legal right to live in the UK.
Failure to check if a tenant is living in the UK illegally before letting them a property will consequentially slap a fine of up to £3,000 on any Landlord. I went over his paperwork which was all in order (and should any Landlord in Tameside want to make sure their Buy-to-Let investments are all correctly signed for and on the right side of the law, please feel free to drop me a line), but it still goes to show that it can be difficult for self-managed Landlords to keep ahead of legislation and regulation restrictions and changes, adding to the headache.
But then surely if other Landlords are looking to dump their properties onto the market to release the stress, the investment opportunities should be through the roof?
|Property Type||January 2017||January 2018||Percentage Change|
I took a look at the number of properties available on Droylsden’s property market as of right now, and compared the numbers to last year which tells an interesting story:
In comparison to the United Kingdom as a whole, Droylsden is far from being a trend follower with a -4% decrease in available properties. The reduction in available terraced properties by 25% was foreseeable due to the huge increase on property value, with investors undoubtedly looking to make the most of the increase.
I’ve touched base with a few Landlords whose properties my agency currently manage in the area to see their thoughts on the matter, as well as other local property professionals, to realise that the reduction of properties isn’t down to Landlords offloading their investments back onto the market.
The property market has a whole has been rocked in the last 12 months, particularly when you factor in circumstances such as Brexit. The change in number and type of properties for sale however is due to the owner-occupier market as opposed to the original suggestion from the report, as for the past ten years, a small number of Landlords in Droylsden (and indeed, Tameside as a whole) have been releasing their returns from their buy-to-let properties, which is the nature of all investments of course.
Nationally, the number of rental properties coming on to the market to rent dropped by 16% in Q4 2017 compared to Q4 in 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 in the first place.
So what does this mean for the Droylsden buy-to-let market and you as a Landlord? The increasing amount of investment in the borough is only going to drive property demand higher. Semi-detached properties on the market have seen the largest in growth over the past year, providing ample room for investment opportunities over other types of properties.
You can keep up to date with all the latest Buy to Let deals here on Tameside Property Expert to remain at the forefront of investment opportunities, or alternatively drop me an email or phone call. I’m always happy to discuss your investment opportunities.