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 (Portfolio landlords are landlords that own
more than one rental property).
So,
I thought, “Are Warminster landlords feeling the same?” If so, if these numbers
were applied to the Warminster private rental market, what sort effect would it
have on the Warminster property market as whole?
Talking
to the landlords I deal with, many are feeling optimistic about the future of
the Warminster rental market and the prospect it presents even with the doom
and gloom prophecies that the property market will shrink. Many of those landlords
who are looking to enlarge their portfolio are doing so because they still see
the private 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 Warminster far outstripping
current savings rates, the short term prospect of a readjustment in property
prices isn’t putting off Warminster landlords.
The
art to buying a Warminster 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 to
the private rental market for their accommodation needs.
So,
what of the numbers involved in Warminster?
There
are 264 landlords that own just one buy to let (BTL) property in Warminster and
575 Warminster landlords, who are portfolio landlords. Between those 575 Warminster
portfolio BTL landlords, they own a total of 1,207 Warminster 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 236 Warminster 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 arguing 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
landlords. Despite these latest changes, many landlords still view buy to let
as a good investment.
If
you want to buy right and assess your own portfolio on the yield/capital growth
seesaw ... drop me a note.
