Tuesday, 10 May 2016

The Aylesbury lettings market today…What landlords need to know.

A lot has happened over the last year that impacts on landlords. We have had a raft of new legislation, changes in Stamp Duty thresholds for landlords investing and more tax changes on the way. There has been good news with considerable increases in selling prices giving landlords substantial capital gains and in most cases rents have also increased significantly.

But where are we now? What impact have these changes had? Is buying to let still a sensible option? What is the current state of the Aylesbury lettings market?
Yes it is still a sensible investment to buy to let. The capital gains we have seen, and are likely to see, are substantial enough to give a sensible return in excess of other investments available to you and me. The tax changes will have an impact, so if you are highly geared it may become marginal on a monthly return basis, but the capital gains are likely to overshadow this if you have purchased the right property.
Rents seem to have reached a plateau over the last few weeks. Looking at Rightmove this morning there are 250 available properties. This includes 64 commercial properties but is still higher than the sub 200 levels we saw earlier this year. Noticeably there are increasing numbers or properties appearing as reduced. It reinforces the need to get your price right at the start of your marketing and to not be too ambitious. Do not be led by an over excited agent trying to hit his listings target, look at the evidence in detail. For example if you are letting a modern two bedroom house Rightmove will show you that almost everything sub £900pcm has been let, those over £900 have likely had to reduce, had that something extra that appealed to tenants, continue to wait for the right tenant or just got lucky when the market supply was poor.
Whilst mentioning Rightmove be aware that they are in the process of changing the way they display property. A standard display will include two photographs…looking this morning there are many properties that only have one photo showing, check with your agent, hopefully they will already be on the ball with this.
Rightmove have also changed the filters you can use as a viewer. Of the 250 properties listed today 19 of them do not appear using any filter, not great if you are trying to let! Check your agent has listed your property correctly.
The increase in available property numbers is not only a result of landlords buying early this year to avoid the revised Stamp Duty  but also tenants being reluctant to pay the increased market rents. Notably we are seeing very few tenants ending their tenancies at present, preferring to avoid moving costs and stay where they are. Many landlords, rightly, take a softer view on increasing rent if they have a reliable tenant in place so existing tenants are tending to stay put.
In summary the lettings market remains strong. If you have the right property, in a sensible location, present it well and don’t over price it you will let readily to good tenants. Do make it as tax efficient as possible ( I can point you in the right direction if this is an area you are not sure about) and do make sure you are up to date with legislation changes.
I am on holiday at the end of this week for two weeks so if you are popping by Declen will be pleased to help you. It is worth noting that he makes a better cup of coffee than me!
Nala pretends to ignore treats while her friend Syren takes pole position