A number of landlords, who own property in Thanet, have made contact with me recently asking for my thoughts on the future of the buy to let market in Thanet. In future articles, I will talk about the Thanet and what has happened to rents, property values, tenant demand and yields; all important matters for a landlord.
Thanet property values throughout 2014 rose between 5.6% and 8% (5.6% in Margate, 6.5% in Broadstairs and 8% in Ramsgate. Good news all round, but when you consider property values in the peninsula have previously dropped by 17.8% between February 2008 and April 2009, this is not as good as the media would have you believe. It should be no great surprise to hear that Thanet property values are starting slow up as we head in to the New Year. Property values in the peninsula were growing at 1.3% a month in the late Spring /early Summer months of 2014, but in the later Autumn months they slowed down considerably to increases of between 0.1% and 0.2%.
The reality is we have had a year and a half of decent market conditions in Thanet, but now all that pent up demand is starting to fade. The big question moving forward is whether the Thanet market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Thanet property market.
Looking at the UK as a whole, because we can’t look at Thanet in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.
Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.
However, back to Thanet, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-
· “Should I sell my property in Thanet, or even buy another?”
· “Is the time right to buy another buy to let property in Thanet and if not Thanet, where?”
· “Are there any property bargains out there in Thanet?”
Many other Thanet landlords, both who are with us and many who are with other Thanet letting agents, like to have a chat and coffee with me to discuss the Ramsgate, Margate and Broadstairs property market, how Thanet compares with its closest rivals (Canterbury, Herne Bay and Dover), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.
In the meantime may I take this opportunity to wish you all a prosperous 2015.
If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market please call me on 01843 610 611.