My thoughts to the landlords and homeowners of Staines…
The tightrope
of being a Staines buy-to-let landlord is a balancing act many do exceptionally well.
Talking to several Staines landlords, they are very conscious of their tenants’
capacity and ability to pay the rent and their own need to raise rents on their
rental properties (as Government figure shows ‘real pay’ has dropped 1% in the
last six months). Evidence does suggest many landlords feel more assured than
they were in the spring about pursuing higher rents on their properties.
During the summer
months, historic evidence suggests that the rents new tenants have had to pay on
move in have increased. June/July/August is a time when renters like to move,
demand surges and the normal supply and demand seesaw mean tenants are normally
prepared to pay more to secure the property they want to live in, in the place
they want to be. This is particularly good news for Staines landlords as
average Staines rents have been on a downward trend recently. So look at the
figures here..
Rents in Staines on average for new tenants moving in
have risen 0.9% for the month, taking overall annual Staines rents 0.9% lower
for the year
However,
several Staines landlords have expressed their apprehensions about a slowing of
the housing market in Staines. I think this negativity may be exaggerated.
Before we get
the Champagne out, the other side of the coin to property investing is capital
values (which will also be of interest to
all the homeowners in Staines as
well as the Staines buy-to-let landlords).
I believe the Staines property market has been trying to find some level
of equilibrium since the New Year.
According to the Land Registry…
Property Values in Staines are 2.54% higher than they
were 12 months ago, even though they dropped by 1.33% last month
However, don't forget that those sales figures reflect the sales of Staines properties
that took place in early Spring 2017 and only now are exchanging and completing
during the summer months.
The reality
is the number of properties that are on the market in Staines today has risen
by 33.3% since the New Year and that will have a dampening effect on property values.
As tenants have had less choice, buyers now have more choice ... and that will
temper Staines property prices as we head towards 2018.
Be you a
homeowner or landlord, if you are planning to sell your Staines property in the
short term, it is crucial, especially with the rise in the number of properties
on the market, that you realistically price your property when you bring it
to the market ... with the increase in choice of properties, the
balance of power during negotiation generally sways towards the buyer. Given that everyone now has access to
property details, including historic stats on how much properties have sold for,
they will be more astute during the offer and negotiation stages of a purchase.
However, even with this
uplift in the number of properties for sale in Staines, property prices will remain
stable and strong in the medium to long term. This is because the number of
properties on the market today is still way below the peak of summer of 2008,
when there were 288 properties for sale compared to the current level of 192 (if you recall, prices dropped by nearly 20%
in Credit Crunch years of ‘08 and ‘09).
Compared to 2008, today’s lower supply of Staines properties for sale will
keep prices relatively high...and they will continue to stay at these levels
for the medium to long term.
Less people are moving than
a few years ago, meaning less property is for sale. Fewer properties for sale
mean property prices remain relatively high and this is because of a number of underlying
reasons:
Firstly, buy-to-let landlords tend not sell their properties as often
as owner-occupiers, consequently removing the property from the housing
market selling cycle.
Secondly, Stamp Duty is much higher compared to 10 years
ago (meaning it costs more to move). Next, there is a dearth of local authority
rental housing so demand for private rented housing will remain high.
Then we
have the UK’s maturing owner occupier population, meaning these older people
are less likely to move (compared to when they were younger).
Another reason is
the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only
building 145k a year!)
and finally, the new mortgage rules introduced in
2014 about how much a person can borrow on a mortgage has curtailed demand.
Some final thoughts before I go – to all the Staines
homeowners that aren’t planning to sell – this talk of price changes is
only on paper profit or loss. To those that are moving ... most people that
sell, are buyers as well, so as you might not get as much for yours, the one
you will want to buy won’t be as much, (swings and roundabouts as Mum used to
say!)
To all the Staines landlords – keep your eyes peeled – I have a feeling
there may be some decent buy-to-let deals to be had in the coming months.