Thursday, March 10, 2016

303 Bingham Homes bought by private landlords in the last 20 years – Is this the end for first time buyers?



I bumped into a local property investor and he wanted to know my thoughts on the future of the Bingham property market, and I would now like to share with you that conversation, my Bingham property Blog reading friends.

People are always going to need a roof over their heads – it’s a necessity for every single person. The 22 to 30 year olds of the town have a choice in what type of roof they have ... they can rent from the council, they can rent from a private landlord or finally they can get a mortgage and buy something. In the 70’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently, fewer young people of Bingham have been buying; choosing to rent instead – mainly from private landlords (as councils have been selling off council housing on the Right to Buy schemes).

Roll the clock back 20 years and Bingham was a different place. There were 2,900 households in Bingham and 2,248 of those were owner occupied. Move to the present, and with all the building in the town, the total number of households has increased by 34.1% to 3,889 and quite surprising (to me at least), the number of owner-occupiers has increased to 2,969.

However, it's the rented sector that is truly fascinating … twenty years ago, only 111 properties were privately rented in Bingham ... and now its 414!

The twenty-somethings of Bingham haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 365 to 119 over the same twenty year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Bingham and those who educate themselves and treat it as a business will survive and prosper.

The best way Bingham landlords can protect their property investment (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Bingham (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

I have also been asked ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are, that with such low supply (numbers of property for sale), and high demand, it is hard to imagine Bingham property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the the housing market should return to balance.

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