There’s a potential blessing in disguise for Rotherham landlords.
If I were a buy-to-let landlord in Rotherham today, I might feel a little bruised by the assault made on my wallet in the last 12 months by HM Treasury’s tax changes on buy-to-let.
To add insult to injury, Brexit has caused a tempering of the Rotherham property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Rotherham property prices do drop, the downside to that is that first time buyers could be attracted back into the Rotherham property market – this means less demand for renting which means rents will go down.
Yet, before we all run for the hills, all these things could be serendipitous for every Rotherham landlord.
Rotherham has a population of over 100,000, so when I looked at the number of people who lived in private rented accommodation, the numbers were quite interesting:
11.8% is a significant proportion of the market and includes 12,877 occupiers according to the last census. Now, if property values were to level off or come down that could help Rotherham landlords add to their portfolio. Remember that yields will rise if Rotherham property prices fall, which will also make it easier to obtain a buy-to-let mortgage. The income would cover more of the interest cost.
Rental demand in Rotherham is expected to stay solid and may even see an improvement if uncertainty is protracted.
However, there is something even more important that Rotherham landlords should be aware of: the change in the anthropological nature of the potential first time buyers in their 20s.
How generational changes might impact the buy-to-let market
I have just come back from a visit to my wife’s relations after a family get together. I got chatting with my wife’s nephew and his partner. Both are in their mid/late twenties, both have decent jobs in Rotherham and they rent.
Yet, here was the bombshell: they were planning to rent for the foreseeable future. They had no plans to even save for a deposit, let alone buy a property.
I enquired why they weren’t planning to buy? The answers surprised me and they will surprise you too.
Firstly, they don’t want to put cash into property – spending money on living, socialising, holidays and technological gadgets is much more of a priority for this generation. Secondly, they want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs.
Apparently all their friends feel the same.
I was quite taken aback that buying a house is just not top of the list for these youngsters.
So, if 11.8% of Rotherham people are in rented accommodation and if that figure grows over the next decade as expected…
Now might just be a good time to buy property in Rotherham.
And if you have money, what else are you going to invest in? You can get involved in the tumultuous stock markets run by sharpe suited whizz kids… but property is a real investment – something that you can touch! There is nothing like bricks and mortar!
For more views and opinions on the property market here in Rotherham you can catch up with my other blogs. I would also love for you to get in touch with me. Finally, you can always follow me on Facebook or Twitter to get the most up-to-date information.
