Dartford house prices since the Millennium have risen by 164.75%, whilst
average salaries in Dartford have only grown by 51.27% over the same time
frame. This has served to push homeownership further out of reach for many Dartford
people as they have to battle against raising considerable deposits and meet sterner lending
criteria, as a result of new mortgage regulations introduced in 2014/5. The private rental market in Dartford has grown throughout the last
twenty years with buy-to-let investors purchasing a high proportion of newly
built residential properties that were built and designed for the owner occupier
sales markets. For example, in the Dartford
Constituency, roll the clock back 20 years and there were 35,855 properties in
the Constituency, whilst the most recent set of figures show there are 42,486
properties - a growth of 6,631 properties.
Nevertheless, some say this historic growth of the Dartford rental market
might start to change with the new tax rules for landlords introduced by Mr.
Osborne over the last seven or eight months. Yet the numbers tell another
story. Across the board, mortgage
borrowing climbed to a 9 year zenith in March this year as the British property
markets traditional Easter rush corresponded with landlords hurrying to beat
George Osborne’s new stamp duty changes – buy-to-let landlords borrowed £7.1bn
in March 2016 (the latest set of figures released) which was 163% up on the £2.7bn
borrowed in the previous March.
You see, from my
point of view, I don’t think things will get worse in the buy-to-let market in Dartford
and these are the reasons why I believe that:
Firstly, what else
are Dartford landlords going to invest in if it isn’t property - the stock
market? Since the Millennium, the stock
market has risen by an unimpressive total of 5.54%, quite different to the 164.75%
rise in Dartford property prices?
Secondly, its true
the 3% stamp duty is the first blow on top of
a number of other tax changes to be phased in between 2017 and 2021, such as
landlords facing a constraint in their ability to offset mortgage interest and, if sizeable
numbers of landlords do take the decision to sell their portfolios, this will
lead to a substantial amount of second hand properties being put up for sale. Yet
that might not be a bad thing, as I have mentioned in previous articles there
is a serous shortage of properties to buy at the moment in Dartford: the stock
of property for sale being at a six year all time low.
.. Thirdly, if there are fewer rental
properties in Dartford, as supply drops and demand remains the same (although
ask any letting agent in Dartford and they will say demand is constantly
rising) this will create a squeeze in the Dartford rental market and as a
result rents will rise. In fact, I predict even if landlords don’t sell up, Dartford
rents will rise as Dartford landlords seek to compensate for increased costs,
which means more landlords will be attracted back.
For more thoughts on the Dartford
Property market to read articles like this, you might find the Dartford
Property Report blog of interest www.dartfordproperty.blogspot.co.uk
