On the surface, with stamp duty changes and a cut in tax relief for certain buy to let investors, there is a gloomy outlook in the buy to let market. It is clear that the government is aiming to encourage more first-time buyers to buy property and it seems that their main strategy to achieve this aim is to discourage buy to let investors.
While some buy to let investors will think about pulling out of the market, there is an argument for increasing your property portfolio.
If current investors are selling up, there will be a supply of property
Some investors will be looking to get out of the market, which increases the supply of properties in the market. While there are many factors involved with house prices, basic economics suggest that an increase in supply can result in the fall of prices, which means that there may be opportunities for you to obtain property at an affordable rate.
It is well worth keeping tabs on the property market to determine if current investors are selling up.
Stockport rental yield is still enticing
Every individual has their own take on what represents a good return for their investment. This means you need to weigh up what is a satisfactory return for you but many industry experts suggest that anything above 4% is a worthwhile long-term investment in the property market.
Examining the projected rental yield in the SK1 postcode, Stockport should be viewed as a sensible location to invest in. The projected rental yield for a one bedroom property is 7.96%, for a two bedroom property it is 6.4%, for a three bedroom property it is 4.93%. For a four bedroom property, the projected rental yield is 5.66% and for a 5 bedroom property, the projected rental yield rises to 9.86%.
No matter how much money you have available to you, or how much of a mortgage you can justify, there is a notable rental yield on offer by investing in the Stockport market.
Property prices in Stockport provide scope for a return on investment
Examining property prices in an area isn’t always advisable due to the number of variables involved with calculating prices. The fact that different companies use their own figures means that it can be difficult to say exactly what is happening, but you can get a general idea.
For the 12 month period between December 2014 and December 2015, the average property price in Stockport rose by about 3%. This isn’t a huge rise, and certainly something that wouldn’t be enough to deter property investors. Of greater interest is the fact that one leading property investment company that releases average sales figures suggest that the average price of flats in Stockport fell by 10% in this time period. The average price stated for flats in December 2014 stood at £116,281 but in December 2015, this figure was at £104,900. Combining this knowledge with the projected rental yield for one and two bedroom properties suggest that there is scope for buying flats in Stockport.
At Spencer Harvey estate agents, we are Stockport property experts, and we understand the market. We appreciate that many investors and landlords are reviewing their long-term future, but we believe that there is scope for landlords to actually add to their property portfolio as opposed to reducing the properties they are responsible for.
If you would like to discuss your property portfolio options, arrange an appointment and we’ll be more than happy to talk you through the market and what forthcoming changes mean to you and your investment.
www.spencerharvey.co.uk