Monday, 22 May 2017

Should you still be investing in Falmouth Buy To Let?

If I were a buy to let Landlord in Falmouth today, I might feel a little bruised by the assault made on my wallet after being ransacked (and continuing to be so) over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Falmouth property market with property prices not increasing at the levels we have seen in the last few years.


Could we indeed see a very slight drop in property prices this year?

Falmouth Town Councils bid to introduce (after mid-June) licencing of properties without an existing history of HMO letting in Falmouth is surely likely to have an impact on values of student let properties for example. This is because new Landlords will be cautious over buying a property that does not have a history of HMO letting. It is not a given that they will be granted a licence and will therefore hold off buying properties for HMO letting. Conversely a property with a history of letting might appear to be an even more valuable asset, if the granting of licences is restricted. Watch this space! 


There are some positives of falling house prices.

If Falmouth property prices do drop, this might encourage first time buyers back into the market. This will help the development of sales chains. After all property sales are reliant on new entrants at the bottom end of the market to feed the chain above. Putting it simply for many, we cannot buy unless we sell first.

If prices cool, yields will rise. This in turn will also make it easier to obtain a buy to let mortgage. If property values come down enough, that might persuade landlords to add to their portfolio. These are likely to be marginal things for landlords but nonetheless positive.

Rental demand in Falmouth will remain solid. This is reinforced by a growing sense of the way many young people view their ‘property futures’.

 I have just come back from a visit to my relations after a family get together. I was speaking to a young couple, both are in their mid/late twenties, both have decent jobs, and they rent. They are perhaps typical of ‘generation rent’. Conversations about the possibility of one day being able to buy their own homes bores them. Not because they don’t harbour a desire to be a homeowner but because they see the dream as a hopeless one too distant to contemplate.

 Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising, by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. Looking through the lenses of a forty something should I be surprised that buying a house is just not top of the list for these youngsters?

Falmouth - Accommodation Type and the Number of Occupiers
Owned outright - Falmouth
Owned with a mortgage - Falmouth
Shared ownership (part owned and part rented) - Falmouth
Social rented (aka Council Housing) -  Falmouth
Private rented - Falmouth
Living rent free - Falmouth

With nearly 23% of Falmouth people already in rented accommodation (and set to grow) now might just be a good time to buy property in Falmouth. After all what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids? A holiday of a lifetime in North Korea perhaps?  Maybe a donation to your favourite political party?


Nothing out there is as good as bricks and mortar!




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