Martin & Co Chief Executive Ian Wilson gives his thoughts on the future of Buy-to-Let in Sky News Interview

Last week you may recall that we released the Spring 2016 edition of our Market Intelligence Report.

This publication has been very well received and the content has been featured in The Times 'Bricks & Mortar' supplement, as well as The Metro.

You may have also seen Martin & Co Chief Executive, Ian Wilson, being interviewed by Ian King on Sky News. A short clip of the interview can be found by clicking here.

To request your free copy of the report please contact me on either 01243 887887, email matt.berry@martinco.com or pop in and see us at 12 Southgate, Chichester, PO19 1ES.

Similarly, if you are considering your next buy to let investment in Chichester, or thinking of entering the market for the first time, please get in touch with us - we always give our advice freely on a no-pressure, no-obligation basis.

Landlords Market Intelligence Report - Spring 2016

This year, Martin & Co celebrates 30 years as the UK lettings industry's expert.

To mark our progression over the years we have produced a celebratory, special edition market intelligence report analysing the private rental sector and its evolution since the first Martin & Co office opened in 1986, when just 10% of all UK property was being rented privately.

Today that number has virtually doubled, with 19% of households privately renting, a total of around 4.3m properties. Thus, landlords and the buy-to-let sector now occupy a fifth of the UK market.

"The population will divide into those who own multiple properties and those who rent." Ian Wilson, CEO, Martin & Co UK PLC.

The number of mature adults renting today has also skyrocketed 346% since the 80s, and house prices have grown a staggering 768% in the same time frame, at double the rate of FTSE shares (342%).

Average rents today stand at just over £750pcm and are growing at 3pc a year.
Nevertheless, media coverage and government intervention ignore these facts and signal the end of buy-to-let.

However, the figures stack up in favour of all serious landlords, and the last 30 years paint an interesting picture for further growth in the future. Migration, rising property prices and a much higher student population mean that more households will choose to forego owning a house in favour of the stability of renting, an estimated 100,000-200,000 households a year for at least the next five years.

"There is nothing the government can do to stop this growth unless it acts to control rents and grant tenants security of tenure." Ian Wilson.

We have the expertise to help you find, buy and manage an investment property, with all the support you need from your local Martin & Co team in Chichester.

If you are interested in receiving a FREE copy of the latest report please contact me on 01243 887887 or email matt.berry@martinco.com

Boshams Top 10 Most Expensive Streets

As we have recently been discussing the Bosham property market, I thought that you might be interested in finding out which are the most expensive streets in the PO18 postcode sector:

Rank	Street	Average Price	Transactions
1	Bosham Hoe	£1,819,840	38
2	Lower Hone Lane	1,712,713	3
3	Shore Road	£1,313,217	37
4	Harbour Road	£1,297,501	4
5	Smugglers Lane	£1,281,257	36
6	Windmill Field	£1,266,900	5
7	Steels Lane	£1,139,784	4
8	Church Meadow	£1,078,652	11
9	Cheesemans Lane	£1,066,202	9
10	Five Acres Close	£1,056,825	4

The Bosham Buy-To-Let Market

You may recall that last week we discussed a two bedroom apartment in Old Bosham as our buy-to-let 'deal of the day'. As we thought, the property didn't hang around for long and a sale was agreed within 48 hours of marketing! This provoked a discussion in our office as to why Bosham is such a popular and desirable place to live and invest in buy-to-let property.

Firstly, we looked at the available housing stock in Bosham. We found that out of 6,650 properties in the PO18 postcode sector, only 7.24% were apartments. Compare this to the national average of 17.42%. This implies that apartments in Bosham are few and far between. One of the most common demographics of tenant we have on our books are professional singles/couples looking for one or two bedroom properties - put simply, demand outweighs supply!

We also looked at the average house price in Bosham. The average price paid for apartments is currently £222,300, which has seen an increase of over £47,500 (or 27.28%) over the last 5 years. Compare this to the similar sized village of Tangmere to the east of Chichester which has seen a far more modest increase of just over 13% for the same profile of property. 

For those of you who are not too familiar with the local area, Bosham also boasts it's own railway station and is close to the A259 which runs parallel to the A27 dual carriageway, ideal for tenants who need to commute into Chichester, Portsmouth or beyond.

The above factors are key indicators that all landlords should be taking into account when considering any purchase.

As always, if you are thinking of investing in the local buy-to-let market please do give myself or our team a call on 01243 887887 for free, no pressure advice.

Buy-to-let Deal of the Day - Character Property offering 4.6% yield and 20% capital growth!

When speaking to local landlords in Chichester the topic of what is considered to be a "good" rental yield is often comes up in conversation. 

Those of you who are familiar with the local BTL market will know that yields in our larger neighboring cities, such as Portsmouth, Brighton and Southampton can often warrant double-figure returns. Chichester, being an affluent Cathedral City brings with it a never diminishing demand for housing, thus local investment landlords often have a long-term strategy in mind to maximise their capital growth over time.

There are, however, plenty of opportunities out there that give the best of both worlds - a healthy gross yield plus strong capital growth.

We have just taken onto the Sales market a two bedroom ground floor apartment in Old Bosham. The flat has always rented well for £875-895pcm attracting single professionals as well as professional sharers (Rolls Royce, St Richards hospital staff, for example).

On the market at £235,000, a purchaser could expect to see a return of 4.6% based on the higher rental estimate - very good indeed locally.

Further still, as the property is situated within a converted Vicarage, the apartment oozes character which will always appeal when considering selling the property in future. Prices in Walton Lane have increased by almost 20% over the last 5 years, making, in my opinion, a very attractive buy-to-let proposition.

For more information on this particular property please give me a call on 01243 887887, email matt.berry@martinco.com or visit http://www.rightmove.co.uk/property-for-sale/property-40015452.html

The Future of Buy-To-Let Investment

I ran into one of our landlords last week, who owns quite a few properties in Chichester and we got talking about the recent changes in taxation for landlords and how this was going to affect him. There have been lots of reports about this and a lot of landlords are worrying about how this is going to impact their investment, so I thought I would have a look into it and outline some of the facts.

So, let us start by looking at what is going to be changing. The first change is stamp duty. Currently you pay no stamp duty on the first £125,000. You then pay 2% between £125,000 - £250,000, 5% between £250,000 - £925,000, 10% above £925,000 up to £1.5m and then 12% above £1.5m. The proposed changes mean that as of April 2016, if a landlord buys a property for buy-to-let, their stamp duty bill will face a 3% surcharge.

In 2017, Landlords’ tax relief is going to be affected as they will no longer be able to deduct mortgage interest from their rental income before it is assessed for tax, but will instead get a flat rate of 20% tax credit. This means that those paying a higher tax rate will lose half of their relief, while some others will be moved into this bracket and will likely see their tax bill soar.

Landlords are also facing a change to the way they pay tax when they sell their buy-to-let properties. At present, capital gains isn’t due until the end of the tax year, but from April 2019 landlords will have to pay their capital gains bill within 30 days of selling the property.

A lot of landlords have asked, why have these changes been made? The reports say that it is a way of trying to slow down buy-to-let landlords snapping up affordable property, freeing them up for first time buyers. The Council of Mortgage Lenders revealed in November 2015 that the number of buy-to-let mortgages granted had increased by 36% in the previous 12 months, whereas mortgages granted to first time buyers was up by just 10%.

So what does this mean for the future of buy-to-let? I believe that we will see a few landlords initially sell up that can’t be bothered with the hassle of it all, but after the initial huffing and puffing, it will all settle down. With the stamp duty changes, landlords will end up factoring this in to their initial investment and end up hanging on to the property for a little bit longer to re-coop some more rental income and in turn maximise their capital growth when it comes to selling.

Some banks have accounts whereby they are giving cashback on their direct debits and/or on “balances between” which may help with the finances, might be worth investigating this with your bank to see if it is an option.

In summary, whilst these changes will impact how buy-to-let works for landlords and for those with properties currently let out, there is an element of recalculating and re-jigging finances. For new landlords it will become ‘the norm’ and will be something that potential landlords will factor into their investment when doing their calculations. The best bet is to have a chat with a Financial Advisor as they will be able to point you in the right direction when it comes to tax.

Buy-to-Let Deal of the Day - 4% Gross Yield Close To High Schools

I was interested to hear last week that the average first time buyer now earns over £50,000 per year and has to provide a deposit in the region of £30,000 to get onto the housing ladder.

It is no surprise then that many people are now considering renting as a long term alternative to buying. This maturing tenant market means that good quality family homes to close to local schools are always in demand. 

Looking on Rightmove this morning I noticed this charming three bedroom cottage on Grove Road (just off Kingsham Road, near the High Schools).

http://www.rightmove.co.uk/property-for-sale/property-39400887.html 

On the market with Cubitt & West estate agents at offers over £300,000, the property has been extended into the loft space to create three decent sized bedrooms, ideal for a growing family and looks in lovely condition judging by the photographs.

Rental values for three bedroom houses in Grove Road have been known to reach £1125pcm however I feel a more conservative £995pcm is reasonable for this particular property.

A purchase at the £300k mark with a rent of £995pcm would return a healthy 4% yield. Sale prices in Grove Road are also rising at an encouraging rate of over 18% over the last 5 years, meaning that a property of this ilk could make a savvy buy-to-let investment.