I have been doing some research, looking both at
National and Regional reports on the demand and supply of property and people
together with future projections on the economy, population and family
demographics with some interesting results. According to the Office of National Statistics, in
the last financial year nationally, private renting grew by 74,000 households,
whilst the owner occupied dwelling stock increased by 101,000 and social (aka
council and housing association) stock increased by 12,000 dwellings.
It was the private rental figures that caught my eye. With eight or nine years of
recovery since the Credit Crunch, economic recovery and continuing low interest
rates have done little to setback the mounting need for rented housing. In fact, with house price inflation pushing
upwards much quicker than wage growth, this has meant to make owning one’s home
even more out of reach for many Millennials, all at a time when the number of
council/social housing has shrunk by just over 2.5% since 2003, making more
households move into private renting.
There
are 28,364 people living in 12,973 privately rented
properties
in Huddersfield.
In
the next nine years, looking at the future population growth statistics for the
Huddersfield area and making careful and moderate calculations of what
proportion of those extra people due to live in Huddersfield will rent as
opposed to buy, in the next ten years, 12,156 people (adults and children combined) will require a private rented
property to live in.
Therefore,
the number of Private Rented homes in Huddersfield will need to rise by 5,560
households over the next nine years,
That’s 618 additional Huddersfield properties per
year that will need to be bought by Huddersfield landlords, for the next nine
years to meet that demand.
…
and remember, I am being conservative (with a small ‘c’) with those
calculations, as demand for privately rented homes in Huddersfield could still
rise more abruptly than I have predicted as I would ask if Theresa May’s policies
of building 400,000 affordable homes (which would syphon in this 5-year
Parliamentary term is rather optimistic, if not fanciful?
So,
one has to ask wonder if it was wise to introduce a buy to let stamp duty
surcharge of 3% and the constraint on mortgage tax relief could curtail and
hold back the ability of private landlords to expand their portfolios?
Well
a lot of landlords are taking on these new hurdles to buy to let and working
smarter. Buying the property at the
right price and using an agent to negotiate on your behalf (we do this all the time)
... and the 3% stamp duty level isn’t an issue. Incorporating your property portfolio into a
Limited Company is also a way to circumnavigate the issues of mortgage tax
relief (although there are other hurdles
that need to be navigated on that tack), but just look at the growth of
proportion of Buy to Let properties in the Country since the Summer of 2016 ...
something tells me smart Landlords are seeing these challenges as just that ...
challenges which can be overcome by working smarter.
I
have a steady stream of Huddersfield landlords every week asking me my opinion
on the future of the Huddersfield property market and their individual future
strategy and, whether you are a landlord of mine or not, if you ever want to
send me an email or pop into my office to chat on how you could navigate these
new Buy to Let waters ... it will be good to speak to you (because you wouldn’t
want other landlords to have an advantage over you – would you?).
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