Even with the General Election on the
horizon, property values in Solihull are still 0.31% higher than they were 3
months ago. The diversion and ambiguity
of an election typically makes house sellers who need to sell, price their
property more realistically (although this generally only lasts a couple of
months). Looking specifically at it from a Solihull landlord’s point of view,
the Solihull properties favoured by investors are in short supply in many parts
of the town because of a number of factors.
Firstly,
there’s been an increase in first time buyers coming to buy their first home over
the last 12 months and secondly, to
continue to keep their risk profile as low as possible, the banks have also
been chasing landlords with high deposits (by offering very enticing mortgage
rates on smaller loans). These type of landlords tend to be attracted to the
modern two and three bed town houses and semis in Solihull.
As I mentioned a few weeks back, the pension rules
are changing, which means buy-to-let landlords can use some, or all, of their
pension pot to buy a property (if they are happy to overlook the tax implications)
so whilst many pension pots may not be able to fund a suitably big enough tax free
lump sum to buy the property outright, for most it will provide enough for the 25%
deposit (required by most BTL mortgage providers). It also shouldn’t be
forgotten that, for landlords, the interest paid on the mortgage is tax deductible
against the rent, thus lowering your income tax paid.
In the last 12 months, I have noticed a particular uplift in interest from ‘50 something’
Solihull people wanting to become landlords for the first time. In Solihull,
the highest returns for the lowest investment are at the lower end of the
market eg the classic Victorian terraced house/apartments . Unfortunately Victorian
terraced houses/apartments , with two bedrooms are coming to the market in
smaller numbers than the larger four beds in top end sectors of the Solihull
property market. When looking at the numbers, in the later part of the Summer
of 2014 in Solihull, in one month alone 150 two bed properties were on the
market in Solihull. However, in January this year, a notoriously excellent
bumper month for properties coming on to the market, there were only 110 two
beds to choose from. Today, that figure stands at only 101 ..whilst the number
of four and five beds has increased significantly!
At that lower end of the price brackets, (ie
where first time buyers and landlord investors compete with each other to buy
those smaller properties) I believe, throughout 2015, there will be a steady
decrease in supply and likewise an increase in demand. This could lead to a
polarised Solihull property market, as more properties become available at the
top of market, there may not be so much demand .. and that can only mean one
thing ... prices will go up quicker on the smaller properties than the larger
ones in Solihull, thus narrowing the gap for people looking to move up market!
No comments:
Post a Comment