My thoughts on the future of the Canterbury Buy-To-Let Market
I was recently reading a report by the Home website which suggested that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the market nationally (for sale) jumped by 11% across the UK as a result, so if you to real estate sites like https://www.eddieyan.ca/ you can see how they sell the properties effectively.
Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster wants to heighten standards in the Private Rented Sector.
That's why more and more people in countries as the UK are looking for new ways to invest in this kind of businesses, as the purchases of properties that will increase their value over time, even if they don't have the capital at the beginning, they could apply for a loan for investment which is not difficult now a days, consumers looking for loans with bad credit need look no further than their local high street, there has been a proliferation in such establishments over the last few years.
Other people decide to manage their finance differently, since many invest their money on a college degree, so they end up with loans and debt, and not that well financially at the end of this, although there sites online that offer short term loans, and why they are giving people the opportunity, is because people have other needs like a car for transportation for example.
Interestingly I was chatting with a self-managed landlord from Fordwich, when I was out socially over the festive period, who didn’t realise the other recent legislations that have hit the Private Rented sector, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).
If you are a self-managed landlord though, the consequences are severe because if you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000. That same Fordwich landlord popped into my offices in the New Year, and I checked all his paperwork and ensured he was on the right side of the law going forward – and I offer the same to any landlord in the Canterbury area if you want me to cast my eye over your buy to let matters.
But what of all these extra properties being dumped onto the market in Canterbury? When I looked at the records the number of properties on the market in Canterbury now, as opposed to a year ago, the numbers tell an interesting story …
|1st Jan 2017||1st Jan 2018|
|Plots + Other||26||28||8%|
Overall, Canterbury doesn’t match the national trend, with the number of properties on the market actually rising by an impressive 53% in the last year. It was particularly interesting to see the number of detached properties increase by 78% and the number of terraced on the market increase by 63%.
However, speaking with my team and other property professionals in the city, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will write about soon in my Canterbury Property Market blog later this Spring?). You see, for the last ten years, each month there has always been a small number of Canterbury landlords who have been releasing their monies from their Canterbury buy to let properties - as is the nature of all investments!
Nationally, the number of rental properties coming on to the market to rent fell by 16% in Q4 2017 compared to Q4 2016 .. but that isn’t because there are 16% less rental properties to rent – it’s because tenants are staying in their rental properties longer meaning less are coming on the market to be RE-LET.
Nevertheless, some Canterbury landlords will want to release the equity held in their Canterbury buy to let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks the tenants to hand in their notice days after you put it on the market (because they don’t like the uncertainty and also believe they will become homeless!). This means you have an empty property, costing you money with no rent coming in. However, some letting agents who specialise in portfolio management have select lists of landlords that will buy with sitting tenants in. If you have a portfolio in the Canterbury area and are considering selling some or all of them – drop me a line as I might have a portfolio landlord for you (with the peace of mind that you won’t have any rental voids).
Sales and Lettings Director
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