By Can you remember 10.05pm on Thursday, 7th May 2015 ... when the shock news surfaced that the BBC Exit Polls suggested the Conservatives would be returned with majority? The middle classes in Strood and Wainscot exhaled a huge sigh of relief, as Rochester 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, supportive of its development whilst properly targeting the lawbreaker-landlords renting out below-standard rental accommodation.
Since May though, George Osborne has announced future rises in stamp duty for buy to let landlords and a change in the interest relief on buy to let mortgages. Now, some people have started to question their blue loyalty.
However, things could have been a lot worse for Rochester landlords. Previous ideas of making landlord’s pay more tax was the theory behind increasing 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 Rochester housing market, which is in fact good news for the other landlords, as there is less competition from 'amateur' landlords offering too much.
Just a thought, but making Rochester 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 Rochester of 0.2% over the month of November. That figure doesn’t surprise me due to the time of year. 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 Rochester have risen by 8.4%, not bad when you consider inflation is running at -0.1%.
However, regular readers of my Medway Property Blog know my passion for looking deeper into the stats. The really interesting information is the value growth, but what types of property are actually selling in Rochester? Looking at
Sept 2007 | Sept 2015 | Difference | |
Detached in Rochester | 26 | 18 | -31% |
Semis in Rochester | 82 | 53 | -35% |
Terraced Houses in Rochester | 232 | 165 | -29% |
Apartments / Flats | 50 | 43 | -14% |
Now, the numbers of properties selling in the town has certainly dropped post 2008, but what amazed me were the drop in the number of detached, semis and terraces selling in Rochester compared to the drop in sales of apartments.
Less properties are selling than last decade in Rochester
and the types of properties selling have changed ...
interesting times ahead for the Rochester Property market!
Therefore, all I can say to the landlords of Rochester 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.
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