You find me in a reflective mood today as I want to talk
about the future of investing in property in Penicuik. The truth is that we
have got fat and lethargic, with many people having mistaken the ever rising Penicuik
(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 Penicuik Property Blog reading friends
Whilst George Osborne and John Swinney have decided now
is the time to milk the ‘Golden Cow’ of UK’s private landlords, with changes in
taxation for buy to let property, 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 Penicuik 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 Penicuik over the last couple of decades? Twenty years
ago, 4,153 households (meaning 70.26% of property) were owned, 1,211 (or
20.48%) were rented from the Council and only 131 households were privately
rented (meaning 2.23% of property was rented out by private landlords). Roll
the clocks on twenty years and the change has been seismic ….. now 4,705 of
properties in Penicuik are home-owners (71% of a higher number of properties in
total), only 1,014 or 15.3% are rented from the Council (a huge fall of 25.29%)
and the jump in private renting has been out of this world, as 490 properties
are now privately rented, proportionally 7.4%).
Who
would have predicted 1995 that the private rental sector in Penicuik would have
grown by 231.84% in the proceeding 20 years?
Also, if you had asked someone in 1995 to predict what
would happen to property values over the proceeding 20 years (ie between 1995
and 2015), they might have predicted similar growth to the growth experienced
over the previous 20 years (ie between 1975 and 1995), which was a very
impressive 351.55%. Yes, property values in Penicuik have increased over the
last 20 years (between 1995 and 2015), but by a more modest 282.65% (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 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 Penicuik
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 Penicuik 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 Penicuik buy to let
landlords to thrive in.
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