A month into 2017, the property world has got back up to speed and landlords are enjoying more and more uplifting and positive news. Following disappointing announcements by the Government and the Treasury last year, the buy-to-let market has taken the initiative and is heading for further success. Here are some of the developments from January 2017:
The number of people moving house fell for the first time since 2011
In positive news for landlords, there is a sort of ‘gridlock’ happening in the UK housing market at the moment, meaning that many at both the top and bottom of the ladder are struggling to find available property. Potential first-time buyers are failing to find affordable properties, and as a result are planning on renting for longer in order to wait for the right properties to come onto the market.
The Stamp Duty increases from 2016 and the increasing costs of moving home are also having an effect on purchases and rental moves, meaning that the trend for tenants is one of long-term tenancy which is also positive for landlords who value high occupancy rates and low turnover. Reliable and good tenants are valuable assets to landlords, and this news indicates that they may be willing to stay longer.
Manchester soars, London drops
In the latest rankings for property price growth, Manchester came second only to Bristol with an impressive 8.9% increase over the last year, rewarding landlords who have been ahead of the curve when it comes to investing in the Northern Powerhouse regions.
London, once the leader by a distance, has dropped to a comparatively lowly seventh place with growth of 7.3%. This is hardly a disastrous figure, but one which will do nothing to allay the growing suspicions that the capital is struggling to keep up with previous strong performances.
According to the figures, current house price trends are increasingly leaning towards a narrowing in North-South divide. Nationwide Building Society reported that the average house price across Northern England and the Midlands is currently £156,211. In comparison prices in the South are £326,554.
However, with affordability in the South being squeezed to suffocation (houses in London are now priced at 14 times average earnings), the focus is moving towards the North.
174,000 new homes a year now needed
If the Government is to hit its self-imposed target of building one million new homes by 2020, it will need to build an average of 174,000 houses per year in that time. The target has been met with wide scepticism and most do not expect it to be met.
Most cities and towns across the UK are suffering from a severe undersupply of housing which is pushing more and more people into the private rental market. This is positive news for buy-to-let landlords, as the environment encourages larger demand increasing rental income.
A long-term trend, it is hardly surprising news that the UK is still struggling to supply the affordable housing required to alleviate the issues faced by young home buyers, but as far as implications for landlords go, it is largely positive news and many can now look towards expanding their portfolio safe in the knowledge that supply is unlikely to drop in the short- and medium-term.
The year is still in its infancy, but we can expect the property market to continue on an upward trajectory as things develop. Property values, rental yields and demand for housing are all set to continue to be positive and rewarding for landlords and they should look forward to prosperous times ahead.