My latest research looks at both national and regional reports on the demand and supply of property and people and considers future projection on the economy, population and family demographics. There are some interesting results that will be useful for those who are fascinated by the local property market here in Rotherham (and the shape of property across the UK!)
According to the Office of National Statistics, in the last financial year, national private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social stock increased by 12,000 dwellings.
The number of private rental households has caught my eye
It was the private rental figures that caught my eye. With eight or nine years of recovery since the financial crisis began in 2009, 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. At the same time the number of council/social housing has shrunk by just over 2.5% since 2003, making more households move into private renting.
What about Rotherham?
In Rotherham there are 12,877 people living in 5,416 privately rented properties.
If we look at the future population growth statistics for the Rotherham area and make careful and moderate calculations of what proportion of those extra people will rent as opposed to. buy we can predict how many more people may be in private rented property. In the next ten years, I believe around 5,500 people (adults & children combined) will require a private rented property to live in.
Therefore, we need the number of private rented homes in our area to rise by 1,446 households over the next nine years.
That’s 258 additional Rotherham properties per year that will need to be bought by Rotherham landlords to meet that demand.
… and remember, I am being conservative with those calculations. Demand for privately rented homes in Rotherham could still rise more abruptly than I have predicted as I have previously suggested that Theresa May’s aim to build 400,000 affordable homes 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%? Furthermore, will the constraint on mortgage tax relief curtail the ability of private landlords to expand their portfolios?
The rise of the smarter landlord
Well, a lot of landlords are taking on these new hurdles to buy-to-let and working smarter. Something tells me that smart landlords are seeing these challenges as just that… challenges that can be overcome by working more smartly.
For example, buying the property at the right price and using an agent to negotiate on your behalf and the 3% stamp duty level isn’t an issue. Likewise, 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).
There’s actually been growth in the number of buy-to-let properties across the country since 2016 indicating that landlords are using their brains more! I have a steady stream of Rotherham landlords every week asking me my opinion on the future of the Rotherham 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.
Don’t let other landlords have an advantage over you! Get in touch today…