Bexley Borough’s ‘Generation Rent’ to keep on growing

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Some commentators are saying that buy to let is about to die, with the new stamp duty changes and how mortgage tax relief will be calculated. Have you heard the phrase “Bad news sells newspapers”? Some claim that, nationally, 500,000 rental properties will flood the market in the next 12 months as landlords leave the rental market.
I’m here to explain why buy to let in Bexley Borough is only going in one direction – and not the one the papers say!
According to Sheffield University, a centre of excellence on the topic, buy to let landlords will continue fuelling the growth of the private rented sector in coming decades. They estimate that the rate of homeownership nationally will fall to 50% (today it is 84% in the area) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in the Borough it’s currently less than half of this). This shows that the demand for rental accommodation in Bexley Borough is only going to increase.
These are the reasons why, irrespective of the newspapers’ claims:
·         Over the last six years Bexley Borough property values have risen a lot more than average wages. As homeownership and mortgage availability depend on ability to pay, home ownership is further out of reach for many, at a time when the stock of council houses has withered. (Nationally, the number of council houses in the last ten years has dropped 31.1%, from 3.16m to 2.18m households.)
·             The Tories’ efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much-vaunted Help to Buy Isa, and Starter Homes Scheme, an initiative offering a 20% discount to first time buyers. But if they can’t save for the deposit this means nothing to the 20-somethings of Bexley Borough, who still need a roof over their heads!
·         With the new rules on tax, more landlords will be looking to move away from the one-time honeypot of central London, because its higher prices mean lower rental yields. Together with London’s cooling of house price inflation, more will look further afield, including to Bexleyheath. (I have had the interesting experience of chatting with several central London landlords who got in touch after reading the Bexleyheath Property Blog).
This prediction of growth of the Bexley Borough rental market is despite the government clamping down on tax reliefs for landlords. The days of making guaranteed returns on BTL property are gone. For the last 20 to 30 years, regardless of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it. Today, however, you must take a more considered approach to your existing and future portfolio, especially in Bexley Borough. The balance of capital growth and yield, particularly in the current low interest rate environment, means that landlords need to do more homework to ensure that their investment gives the desired returns.
One place for landlords and homeowners to find this information is on the Bexley Borough Property News Blog: www.bexleyproperty.co.uk. You’re also more than welcome to give us a call on 01322 559955 or pop in for a chat. Our office is located in the heart of Bexley Village (next door to the King’s Head Public House).

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