Investing, is it worth the risk?
In a recent pole of 783 landlords 92% felt that the government was taking a deliberate anti-landlord stance to investors. Those who felt strongest about it were those who had been renting a property for less that 5 years and owned less that 5 properties in total.
Rather unsurprisingly over 74% of landlords would like to see this year’s Stamp Duty changes scrapped in this week’s Autumn Statement. Obviously the increased cost this is putting on buy to let investors is slowing the market for second properties, and in some instances putting off potential investors.
Landlords (and potential landlords) seem to be feeling that the actions taken by the government to try and increase the available stock for first time buyers is punishing them unfairly for having a rental property. While there is obviously a need to keep a good stock of available properties on the market, it would be easy to argue that with landlords potentially being scared out of investing their money in property. If landlords did decide to sell up in increasing numbers this could then lead to a shortage of available rental properties. This could lead to an increase in rents from those properties still available, making it harder for first time buyers to save up their all-important deposit.
Many feel that the increased stamp duty tax on additional property purchasers is an attempt at raising funds to give the house building market a much needed boost. The calls for an increase in government backed or funded building are getting louder by the day as the country is dealing with a massive shortfall in housing stock.
While it may be that landlords are now considering selling their rental properties due to the increased pressure they are feeling, what the market is desperately crying out for is affordable newly built properties for those first time buyers to get a foot on the ladder. This, rather than the restrictions on the buy to let market, would be the best way to stimulate the market.
The bank and financial planners Aldermore have recently released a warning that the UK’s housing shortfall will rise by a further 318,632 by 2020 at the current rate of growth. The lender says the UK’s house building output against the 250,000 figure recommended in the Barker Review in 2004 shows a shortfall of 915,930 houses as of the beginning of 2015.
To meet the annual recommended target of 250,000 homes a year, the UK must build 685 homes a day, Aldermore says. Over the past twelve years, UK house builders have fallen short of this target by 210 homes per day at 475, below 70% of the target.
With potentially uncertain times ahead in the property market all eyes will be on tomorrows autumn statement to see what action the government will take to try and stimulate the market.
For further information contact
Ed Spence, Tenby Office Manager