WHAT DOES 2017 HOLD FOR THE LETTINGS MARKET?
In 2016 the lettings market seemed relatively unaffected by the uncertainty around Brexit and stamp duty changes. Admittedly we saw a boom in property listings in the first 3 months of last year with investors looking to purchase before the stamp duty changes came into place, however we have also come back to a very strong January this year too. It seems that whatever is thrown at the lettings market remains relatively unaffected and continues to be strong. The fact of the matter is- property is still one the most profitable and secure ways of investing.
Laura Fiddes-Baron, Branch Manager at Oulsnam Lettings has made the following predictions for the rental market in in 2017:
Serious investors will increase their portfolio
We think nervous investors who have been contemplating buying a rental property may lack the confidence to try this year due to the changes in tax and increased stamp duty. We think they may hold on a bit longer to see what happens which means the more driven investor will manage to snap up some deals. We noticed this start to happen throughout last year and have been working with an increasing number of landlords looking for a 6% yield and above which is very achievable in prime areas of Birmingham.
Renewals will increase
An uncertain market tends to lead to more people renting until they get security. During the second half of last year we noticed we had more applicants applying for properties who had sold their houses and wanted to rent for 6-12 months until they purchase again if at all. This shows people are nervous about commitment at the moment which generally means more people stay in rented accommodation.
Rents will rise
We think rents will rise due to less rental stock available due to increased renewals. Decreased stock pushes rent up and tenants will have less choice and will end up having to fork out more for the property they want. We also predict that some landlords will be more rigorous about putting their rents up at renewals to try and make up for their increased outlays.
Landlords setting up as a company will continue to increase
Currently, mortgage interest which is incurred by a company is classed as allowable business expenditure which means it's tax deductible. 2016 saw a massive surge in landlords applying for mortgages as a company and with the new tax changes coming into force this year we think this is set to continue.
More Landlords will choose to have their properties managed by an agent
Last year we saw a marked increase in the number of new landlords coming to us to use a managed service. With the mind field of Lettings legislation to get right more and more landlords are finding they simply don't have the time to keep up to date and rely on agent to make sure they are compliant. In 2016 we saw a new section 8 notice, right to rent regulations, EPC regulations and new dividend and wear and tear allowances introduced. 2017 already promises changes in tax but what else?
If you are looking to dip your toe in a buy to let or looking to expand your portfolio and would like some advice then please contact Laura Fiddes-Baron on 0121 445 7410 or email firstname.lastname@example.org.