You find me in a reflective mood today as I want to talk
about the future of investing in property in Bo’ness. The truth is that we have
got fat and lethargic, with many people having mistaken the ever rising Bo’ness
(and in fact the whole of the UK) property market since the 1960’s as the
eternal gift that kept giving as property prices constantly rose and doubled
every five to seven years.
The
days of making money from property as easy as falling off a log, like taking
candy from a baby are sadly over my Bo’ness Property Blog reading friends
With George Osborne, Phillip Hammond and John Swinney having
decided now is the time to milk the ‘Golden Cow’ of UK’s private landlords,
with changes in taxation for buy to let property, and the UK having voted to
leave the EU, many pundits are predicting the end of buy to let as we know it.
However, it is still possible to make a reasonable, profitable and safe return
on property with these changes. You see, I have always seen investing in the Bo’ness
buy to let market (as I would anywhere in the UK), as I might see Mother Nature,
creating some truly wonderful stunning warm weather but at the same time, she
will bite, creating catastrophic situations such as snowstorms and hurricanes.
You need to study the market, take advice and opinions from many people
and then decide what the proverbial property weather will be … remember,
tenants will always want a roof over their head and I don’t see the Scottish Government
building the millions of houses required to house them?
Nobody knows the future, and yes people can predict but I
wouldn’t be afraid of this change ..... because as a famous French proverb says
(I told you I was a reflective mood today), ‘the more things change, the more
they stay the same’. I mean, no one could have predicted how the property
market has changed in Bo’ness over the past few years.
Fifteen years ago, 3,634 households (meaning 60.1% of
properties) were owned, 2,060 (or 34.1%) were rented from the Council or other
Social enterprises and only 131 households were privately rented (meaning 2.2%
of properties were rented out by private landlords).
Roll the clocks on and the change has been seismic …..
the number of properties that are owned in Bo’ness have risen to 4,229 (being
63.2%), properties rented from the Council or other Social enterprises have
actually fallen to 1,867 (or 27.9%) and the jump in private renting has been
out of this world, as 542 properties are now privately rented, proportionally
8.1% which is a 6 percentage point increase (from 2.2%).
Also, if you had asked someone in 1996 to predict what
would happen to property values over the proceeding 20 years (ie between 1996
and 2016), they might have predicted similar growth to the growth experienced
over the previous 20 years (ie between 1976 and 1996), which was a very
impressive 270.6%. Yes, property values in Bo’ness have increased over the last
10 years (between 1996 and 2016), but by a more modest 20.1% (and most of that
can be attributed to house price growth between 2000 and 2006).
The property market is constantly changing and buy to let
for too long has been heavily dependent solely on house price growth, where
yield has been almost forgotten. I see the changes in tax and landlord &
tenant law and the uncertaitly caused by the EU vote in a different perspective
to the doom-mongers and see it as bringing many opportunities. You might need
to change your buy to let benchmarks, your approach to financing or even
consider places other than Bo’ness in which to invest your money, but this will
shine a light on investing in properties with healthier yields and create more
realistic long term buy to let opportunities, instead of short term growth bets
and wagers ..... this is what The Bank of England wants.
The advice I give to my landlords, and you my blog
reading friends is this: these changes will make some landlords panic, meaning
competition for decent Bo’ness buy to let bargains will reduce as fear of
change kicks in and amateur investors flee the market. These opportunities will
provide a more stable platform for knowledgeable and wise Bo’ness buy to let
landlords to thrive in.
If you would like to pick our brains about buying for
investment purposes, please call me on 01506 828096, email me on news@thekeyplace.co.uk or
pop into the office at 19 Main Street for a chat.
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