It’s probably fair to say that 2016 was something of an ‘annus horribilis’ for landlords in Swansea, with the introduction of the 3% stamp duty surcharge, scrapping of the 10% ‘wear and tear’ tax relief, and the start of Landlord licensing through Rent Smart Wales.
As a landlord myself, it felt like we were being dealt blow after blow by the Government to push us out of the market, and 2017 is looking like it may be just as bumpy with the start of mortgage tax relief being phased out and the tightening of criteria on BTL lending.
Many landlords have decided the future landscape of buy to let is not for them anymore, but there will be many opportunities coming our way, too.
The estate agency Haart recently reported that the volume of buy-to-let transactions across England and Wales had more than halved over the past 12 months, following the Government’s outright assault on buy-to-let landlords.
At McCartan Lettings, we have been seeing/been noticing a rise in Landlords deciding to sell year on year, leaving a huge gap in stock availability. Rents have started to rise, in part in line with the rest of the UK and in part down to a lack of stock.
Landlords who are still positive about investing in Swansea can benefit from higher rents, better yields, and from other landlords selling their investment properties.
Analysis published by accountancy firm PwC suggests that by 2025, 7.2m households would be in rented accommodation – a considerable increase compared with 5.4m in 2015 and 2.3m in 2001.
It predicted that a quarter of those tenants would be living in private rented accommodation, reflecting the fact that the private sector has taken over from councils and housing associations as the biggest provider of rented homes in the UK.
With employment on the rise in Swansea, and with its enormous potential for further development (Tidal lagoon, Parc Tawe and the Civic Centre to name a few projects on the cards), it is clear that demand for quality professional family homes is and will continue to be on the rise.
House prices in Swansea grew by 1.9%, an average of just over £2,500, which suggests that house prices could rise further in 2017, so investment property is priced very attractively at the moment for better yields as rents have risen, with future capital growth on the cards too.
As interest rates are at a record low, landlords investing in Swansea should focus on maximising their profit by focusing on investing in areas of growth (Manselton, Morriston), and looking at areas in demand (Uplands, Killay). Now might also be the time to look at your mortgage, and shop around to see if you could benefit from a better deal.
If you are thinking about investing in Swansea in 2017, or need assistance letting a property, please give me a call on 01792 430100 and I will be happy to help in offering my experience of the Swansea property market and buying property to let.