Newbury Landlords count the cost of a Tory Election win

Can you remember 10.05pm on Thursday, 7th May 2015 … with the shock news that BBC Exit Polls suggested the Conservatives would be re elected with a majority? The middle classes in Hermitage and Burghclere exhaled a huge sigh of relief, as Newbury landlords, faced with rent controls from Red Ed and the Labour Party, now had something to cheer about. The Tory’s were always considered to be a political party that accepted the importance of the rental market supporting its development while properly targeting the lawbreaker landlords renting out below standard rental accommodation.

In May 2015 when George Osborne announced future rises in stamp duty for buy to let landlords and a change in the interest relief on buy to let mortgages, some people have started to question that loyalty. However, things could have been a lot worse for Newbury landlords as one idea (which was seriously considered) was to increase Capital Gains Tax rates to the landlord’s own income tax levels. If Landlords would have had to pay capital gains tax of 40% to 45% on any uplift in value, I can tell you here and now, that would have made investing in property a non starter for almost everyone.

However, I will admit the loss of mortgage higher rate tax relief will make a number of properties not stack up financially. The new rules are likely to slow demand in the Newbury housing market, which is in fact good news, as there is less competition from ‘amateur’ landlords offering too much money.

Just a thought, but making Newbury landlords think twice and
run their numbers more cautiously is not such a bad thing.

So looking at the numbers, the November figures have just been released and they show a growth of property values in Newbury of 0.7% over the month. That figure doesn’t surprise me as it can be quite slow coming up to Christmas. It’s quite dangerous to look at one month in isolation, so looking at a more medium term view, over the last 12 months, property values in Newbury have risen by 10.3%, not bad when you consider inflation is running at -0.1%.

However, regular readers of the Newbury Property Blog know my passion for looking deeper into the stats. The really interesting information is the value growth, but how many are actually selling in Newbury? Looking at all the properties sold, as recorded by the Land Registry, within 2 miles of the centre of Newbury in 2015 (this data always runs a couple of months behind the house price data) compared to 2007 (a couple of months before the credit crunch started to bite and the subsequent property crash).

Now I have mentioned in previous articles that the numbers of properties selling in the town has certainly dropped post 2008, perhaps this is the defining reason that house prices increased by 10.3% as the supply and demand balance continues to shift in the favour of the seller.

Less properties are selling than last decade in Newbury
and the types of properties selling have changed …
interesting times ahead for the Newbury Property market!

Therefore, all I can say to the landlords of Newbury is do your homework, make sure the numbers do stack up, take advice and opinion from professionals and above all, for those of you planning to add to your portfolio, buy the right property at the right price.

If you are an existing landlord in Newbury or thinking of becoming one, then a good source of information is the Newbury property blog. Although I operate Downer & Co Letting Agents in Newbury I am also a landlord myself and have over 15 Years experience buying, selling, letting and managing property in the local area. I am always happy to chat to you openly and honestly about any aspect of the local property market.