Bexley Borough Landlords count the cost of a Tory Election win

Remember 10.05 pm on Thursday, 7^th May 2015, when the BBC exit polls brought the shock news that the Conservatives would be returned with a majority? 

Middle class families on roads such as Danson and Latham Road gave a huge sigh of relief. Bexley Borough landlords, faced with rent controls from Red Ed and the Labour Party, had something to cheer about.

The Tories have always been considered a party that accepts the importance of the rental market and supports its development while targeting lawbreaker landlords with below-standard accommodation.

However, since May George Osborne announced rises in stamp duty for buy-to-let landlords in the future and a change in the interest relief on buy-to-let mortgages, causing some to question that reputation. 

Things could have been a lot worse. Under serious consideration was the idea of making landlords pay more tax, increasing Capital Gains Tax rates to the landlord’s own income tax levels. If landlords had had to pay Capital Gains Tax of 40% to 45% on any uplift in value, investing in property would have become a non-starter for almost everyone. 

However, the loss of higher rate tax relief on mortgages makes a number of properties financially unviable. The new rules could slow demand in the housing market. This is actually good news for the other landlords, as there will be less competition from “amateur” landlords offering too much. 

Is making Bexley Borough landlords think twice and run their numbers more cautiously such a bad thing?

The November figures have just been released and they show a growth of property values in Bexleyheath of 0.1% over the month. Considering the time of year, I’m not surprised. It’s quite dangerous to look at one month in isolation. Taking a more medium-term view, over the last 12 months property values have risen by 11.3%. That’s not bad when you consider that inflation is running at -0.1%. 

Regular readers of the Bexley Borough 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?  

Looking at all the properties sold, as recorded by the Land Registry, within the DA6 postcode area in September 2015 (this data always runs a couple of months behind the house price data) compared to September 2007 (a couple of months before the credit crunch and the subsequent property crash), this is what we see:

	Sept 2007	Sept 2015	Difference
Detached in Bexleyheath	2	1	-50%
Semis in Bexleyheath	11	2	-82%
Terraced Houses in Bexleyheath	5	4	-20%
Apartments / Flats in Bexleyheath	5	3	-40%

I have mentioned in previous articles that the number of properties selling has certainly dropped post-2008, but I was amazed by the drop in the number of semis compared to terraced properties, which hardly changed. To ensure we didn’t have a blip, I looked at the sales numbers for the spring and summer months of 2015 and the same in 2007. Guess what? The numbers hardly change!

Fewer properties are selling than last decade in Bexleyheath and the types of properties selling have changed. There are interesting times ahead for the Bexley Borough Property market!

My advice to landlords is that they do their homework, make sure the numbers stack up, and take advice and opinion from professionals. Above all, for those planning to add to their portfolio, buy the right property at the right price. 

One place for advice and opinion on the Bexley Borough Property market is the Bexley Borough Property Blog: www.bexleyproperty.co.uk. And, as ever, you are more than welcome to give us a call on 01322 55 99 55.