Can you remember 10.05pm on Thursday, 7th May 2015 … with the shock news that BBC Exit Polls suggested the Conservatives would be returned with majority? The middle classes in Queen Anne Square and Greyfriars Road exhaled a huge sigh of relief, as Dundee landlords, faced with rent controls from Red Ed and the Labour Party, now had something to cheer about as the Tory’s were always considered to be a political party that accepted the importance of the rental market, supported its development while properly targeting the lawbreaker landlords renting out below standard rental accommodation.
Since May though, George Osborne announced future rises in stamp duty for South of the border buy to let landlords and a change in the interest relief on buy to let mortgages, some people have started to question that loyalty, as the SNP replaced stamp duty with land and buildings transaction tax (LBTT). This is remarkably similar to English and Welsh Stamp Duty and will introduce a 3% supplement on the tax paid on the purchase of additional residential properties on or after 1 April 2016. However, things could have been a lot worse for Dundee landlords as previous ideas of making landlord’s pay more tax was the idea (which was seriously considered) of increasing Capital Gains Tax rates to the landlord’s own income tax levels. If Landlords would have had to pay capital gains tax of 40% to 45% on any uplift in value, I can tell you here and now, that would have made investing in property a non starter for almost everyone.
However, I will admit the loss of mortgage higher rate tax relief will make a number of properties not stack up financially. The new rules are likely to slow demand in the Dundee housing market, which is in fact good news for the other landlords, as there is less competition from ‘amateur’ landlords offering too much.
Just a thought, but making Dundee landlords think twice and
run their numbers more cautiously is not such a bad thing.
So looking at the numbers, the November figures have just been released and they show a growth of property values in Dundee of 0.3% over the month of November. That figure doesn’t surprise me due to the time of year. It’s quite dangerous to look at one month in isolation, so looking at a more medium term view, over the last 12 months, property values in Dundee have risen by 1.7%, not bad when you consider inflation is running at -0.1%.
However, regular readers of the Dundee Property Blog know my passion for looking deeper into the stats. The really interesting information is the value growth, but what types of property are actually selling in Dundee? Looking at all the properties sold, as recorded by the Scottish Land Registry ….
Within the Dundee City in 2005, exactly 3,800 properties sold and changed hands … in 2015, that was only 2,169 .. meaning there has been a drop of 42.9% in properties selling in the City in the last decade.
Therefore, all I can say to the landlords of Dundee is do your homework, make sure the numbers do stack up, take advice and opinion from professionals and above all, for those of you planning to add to your portfolio, buy the right property at the right price. One place for such advice and opinion on the Dundee Property market is the Dundee Property Blog www.dundeepropertyblog.com
