Some of these landlords have bought and completed already this year but are finding that the high rents indicated as achievable by the selling agents have failed to attract any tenants. Some of those landlords need to let swiftly from a financial perspective so are reducing the advertised rent...in turn for some this has made their monthly returns very marginal.
Further the number of investors registering to buy has fallen dramatically. The chances of buying and completing before the Stamp Duty changes apply are ebbing away fast. If you buy today you need to have a proactive solicitor, a chain free property and if using finance a very good lender to stand a chance of beating the deadline.
We are again seeing some price reductions creep on to Rightmove (Rightmove indicates there have been more than 40 price reductions in the month of February, about 10% of what is available), primarily from those agents that are over ambitious with their pricing in an effort to attract new business.
So if the heat is coming out of over ambitious rental and sale prices where are prices going to go. The Brexit referendum looms large in June, elections always have a dampening effect on the property market and I expect the referendum to have a similar effect. Uncertainty is always bad news for the property market. We are all still a little uncertain of what impact the 2017 proposed tax changes are going to have...are we really going to see thousands of landlords off loading their portfolios as the media suggest? I think not or at least not locally.
The demand for good quality rental property remains and is not going to go away, but tenants like the rest of us do not have ever deepening pockets, so I think we will see rents stabilise at their current (still high) levels. However if you are needing to achieve speculative high rents for your new shiny buy to let you may want to double check your figures, in particular if you are paying a high price. Remember the rules of supply and demand. Flat sale prices have been driven up by the lack of supply of houses NOT the strong demand for flats!
As always if you are investing in property in Aylesbury seek out sound advice, many landlords discuss their purchase with me before proceeding. What is really the achievable rent? What work will I really need to do to maximise my return? Is this the right price to be paying? Will this location let readily? Whoever you turn to make sure they know the area and the lettings market.
Have a great weekend!
PS I am hosting a drop in session for landlords on Saturday 19th March 10.00am to 2.00pm at my Temple Street office. Keith Witchell of KRW Accountants will be on hand to answer tax questions along with a range of other property professionals.
http://theaylesburypropertyblog.blogspot.co.uk/ to read further articles from my blog.
|Is this the longest Husky tongue in the world? |
(I know this has appeared here before but it is one of my favourite pictures!)