Personally I feel it could go either way with many external factors such as the start of Brexit expected at the end of March and the beginning of the new tax changes in April this year.
Recently announced good news is that fewer homes were repossessed last year than in any year since 1982 helped by the continuing low mortgage rates. Figures from the Council of Mortgage Lenders (CML) show a total of 7,700 UK homes were repossessed last year compared with 10,200 in 2015.
A stamp duty surcharge on buy-to-let and second homes introduced last April contributed to the slowdown in central London, however Dunstable and other areas of the UK saw house prices continue to grow with Luton and Dunstable in the top 3 for house price growth nationally in 2016.
We still saw a number of new landlords coming to us last year despite anyone buying a home that is not their main residence having to pay a 3% stamp duty surcharge. This surcharge did lead to a burst of activity in March followed by a drop in transactions in April, but for the rest of the year the sales activity continued to grow.
Halifax have just announced that nationally house prices fell on a monthly basis for the first time in five months during January, however this is not been seen at a local level and the properties advertised by agents in Dunstable still continue to increase in price as London buyers favour the area and affordability.
There is a massive amount of uncertainty in the market right now. Many investors may start to sell some of their single let properties when they realise that their properties could start to become cash flow negative when the new tax changes come into effect in April this year.
Could this mean an oversupply of ex rental property available on the market for sale later this year? Quite possibly and maybe in some areas of the country property prices could fall as a result, but with the current strength of the Dunstable market this should only result in a slowing of the price rises we have seen last year.
The potential problem for renters is that a reduction in properties available for rent if landlords are selling will make it even more difficult to find the property they want.
Will this result in continuing rent rises? There is only so far that rents can go before it becomes unaffordable and we are currently at or very close to that point in Dunstable, Houghton Regis and Leighton Buzzard. The number of properties that we have seen having their advertised rent reduced on Rightmove and Zoopla is increasing so it is time for landlords and agents to be more realistic of their expectations when advertising a property.
For investors who are looking to purchase another property this year you might find motivated sellers deciding to sell due to the tax changes. I think it will be a great opportunity to buy property at discounted rates and buying from motivated sellers could be one of the most important strategies if you are looking to build your portfolio.
So far this year we have see a number of tenants looking for property because their landlords are selling increasing substantially so keep your eye on the market as these ex rental properties appear or better still make yourself known to the local Estate Agents so that you are the first person they think of when a landlord decides to sell.
