A
noteworthy number of buy to let landlords in Britain plan to buy more
properties over the next year notwithstanding the frustrations, challenges and seismic
changes in the private rented sector.
According to Aldermore, the specialist
Buy To Let lender, their research shows around 41% of portfolio buy to let
landlord’s objective is to grow their buy to let portfolio (i.e. Portfolio landlords are landlords that
own more than one property).
So,
I thought, “Are Aylesbury landlords feeling the same?” If so, if these numbers were
applied to the Aylesbury private rental market, what sort effect would it have
on the Aylesbury property market as whole?
Talking
to the landlords I deal with, most are feeling quite optimistic about the
future of the Aylesbury rental market and the prospect it presents notwithstanding
the doom and gloom prophecies that the property market will shrink. Many of
those Aylesbury landlords who are looking to enlarge their portfolio are doing
so because they still see the Aylesbury rental market as a decent investment
opportunity.
With
top of the range Bank and Building Society Savings Accounts only reaching 1.5%
a year, the rollercoaster ride of Crypto currency and the yo-yoing of the Stock
Market, the simple fact is, with rental yields in Aylesbury far outstripping
current savings rates, the short term prospect of a minor drop in property
prices isn’t putting off Aylesbury landlords.
The
art to buying a Aylesbury buy to let investment is to buy the profit on the
purchase price, not the anticipation of the future sale price.
No
matter what the historical economy has thrown at us, with the global meltdown
in 2008/9, dotcom crash of 2000, ERM in 1992, the three day week, oil crisis
and hyperinflation in the 1970’s (the list goes on) ... the housing market has
always bounced back stronger in the long term. That’s the point ... long term. Investing
in buy to let is a long-term strategy. The simple fact is, over the long term with
the increasing demand for rental properties, predominantly among Millennials as
many cannot afford to get on the property ladder, and with councils not
building enough properties of any kind, many youngsters are having to resort
the private rental market for their accommodation needs.
So,
what of the numbers involved in Aylesbury?
There
are 844 landlords that own just one buy to let (BTL) property in Aylesbury and 1,838
Aylesbury landlords, who are portfolio landlords (i.e. they own one or more buy to let properties). Between those 1,838
Aylesbury portfolio BTL landlords, they own a total of 3,858 Aylesbury BTL
properties and they can be split down into the size of landlord portfolio in
the graph below….
If I apply the Aldermore figures that means 754 Aylesbury landlords have
plans to expand their BTL portfolio in the coming year or so.
However,
the Aldermore Research also showed that 8% of private landlords intended to
reduce the number of properties they own. They put this down to continuing
Government intervention in the housing market (as many landlords mentioned too
many limitations and higher taxation) while some believed that tenants are
excessively protected to the disadvantage of the landlord.
I
would say there is no repudiating that the buy to let market has taken a bit of
a beating, thanks to a plethora of Government regulation, new mortgage
underwriting rules in 2014 and George Osborne’s tax changes. Yet there still
remains an overall consciousness of optimism among the vast majority of Aylesbury
buy to let landlords. Despite these latest changes, many landlords still view
buy to let as a good investment, as long as you buy right and expand your
portfolio taking into account the second rule of buy to let … assess your
position on the ‘buy to let seesaw’ of capital growth and yield.
If
you want to buy right and assess your own portfolio on the yield/capital growth
seesaw ... drop me a note. Whether you are
landlord of mine or not as the case may be, advice is given freely, without obligation
or cost.
Thank you for reading this article.
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