Even with the General Election on the horizon,
property values in Ringwood are still 1.67% higher than they were 3 months ago,
the diversion and ambiguity of an election typically makes house sellers who
need to sell, price their property more realistically (although this only lasts
a couple of months). Looking specifically at it from a Ringwood landlord’s
point of view, the Ringwood properties favoured by investors are in short
supply in many parts of the town because of a number of factors. One of the
factors has been that we have seen the number of first time buyers coming to
buy their first home increase over the last 12 months in Ringwood.
Another factor has been the fact that the banks have been pushing ‘let to buy’
(yes ‘let to buy’ is different to ’buy to let’) to homeowners (more of ‘let to
buy’ in an up and coming article). Next, because of the banks, who are chasing
low risk landlords with high deposits with very low mortgage rates- and the low
risk landlords with high deposits tend to be attracted to the safer modern two
and three bed town houses and semis in Ringwood.
As I mentioned a few weeks back, the pension rules are
changing which means buy to let landlords can use some, or all, of their
pension pot to buy a property. It shouldn’t be forgotten there are tax
implications taking more than a quarter of your pension pot out, so whilst many
pension pots may not be able fund a suitably big enough tax free lump sum to
buy the property outright, for most it will provide enough for the 25% deposit
(required by most BTL mortgage providers). It shouldn’t be forgotten landlords
that the interest paid on the mortgage is tax deductible against the rent, thus
lowering your income tax paid.
In the last 12 months, I have noticed a particular uplift in
interest from ‘50 something’ Ringwood people wanting to become landlords for
the first time. In Ringwood, the highest returns for the lowest investment are
at the lower end of the market eg the classic apartment . Unfortunately
apartments , with one bedroom are coming to the market in smaller numbers than
the larger four bed’s in top end sectors of the Ringwood property market.
When looking at the actual numbers, in the later part of the Summer of 2014 in
Ringwood, in one month alone 31 two one bed properties were on
the market in Ringwood. However, in January this year, a notoriously excellent
bumper month for properties coming on to the market, there were only 24 one
bed properties on the market in Ringwood to choose from. Today, that
figure stands at only 18 ..whilst the number of four and five beds has
increased significantly ... interesting don’t you think?
At that lower end of the property market in Ringwood, (ie
where first time buyers and landlord investors compete with each other to buy
those smaller properties), I believe throughout 2015, there will be a slow and
steady tipping of the scales between supply and demand. In fact, from what I am
seeing and hearing, early anecdotal evidence has suggested over the last few
months (although we will need to look at figures later in the Spring once we
have the data from The Land Registry), we are beginning to see a polarised
Ringwood property market, where we have high demand but low supply at the
bottom end of the property market, yet high supply but lower demand at the top
of market .. and that can only mean one thing ... prices will go up quicker on
the smaller properties than the larger ones in Ringwood, thus narrowing the gap
for people looking to move up market!
