m_The Garden Apartment, 18A Great Pulteney Street-2

When the going gets tough…get an expert lettings agent on board

With all the economic uncertainty and changes to landlord taxes and stamp duty, it might feel that now is the worst time to consider buying an investment property in Bath but I beg to differ – it might just be the best.

Like the rest of the UK, the rental market here in Bath has changed significantly over the past 20 years. The introduction of the Housing Act 1988 opened up the sector and provided an ideal platform for small scale investors, who also benefitted from lower mortgage rates and more rules supporting landlords. The following boom in the housing market sent prices in Bath soaring and even more private landlords poured into the market attracted by capital growth, with the average price of a home in England and Wales rising by 112% at that time.

There has also been a general change in people’s attitudes towards renting a property over the past decade, as tenants choose to rent in different regional areas before settling down to buy. Student numbers are still propping up the private rental sector, as there is a general lack of accommodation for them, and nowhere is this more apparent than right here in Bath. The overall housing shortage means that rental property is still essential and the private sector is its provider. In 2011, 4.2m households rented – that is 21% of the population, and the estimate for 2017 is likely to be 24%.

However, it is not all good news and the government has done its utmost to dampen enthusiasm by imposing punitive regulations on the private rental sector. The Stamp Duty Land Tax increase in April 2016 means that owners of a second home will now pay an additional 3% charge and, along with buy-to-let tax relief being phased out from April 2017, the Government is also replacing mortgage interest deductions with a 20% tax credit (the change takes full effect in 2020). All this is going to hit landlords in Bath hard, as they will now be taxed on turnover rather than profit – and many smaller investors are selling up rather than suffer such a marked loss of profit.

While the outlook for landlords may appear less optimistic and more challenging than before, there are still real opportunities in the current Bath market for those prepared to stick with it and invest. The key to success is to reshape your portfolio by obtaining the best advice on tax and financial planning and by employing the finest independent agents in Bath as your guides. Pritchards Lettings has a deeper understanding of the subtle changes in the local market and quite literally holds the keys to future opportunities for you.

When perceived dips are reported in the market, this usually means a small number of sellers will have to wait longer to sell their homes and ultimately accept less profit than they had initially hoped for and we have seen this happening here in Bath. As local market reductions emerge, this presents new opportunities for landlords who still want to buy an investment property in Bath, as they find they have the pick of properties in desirable locations for renters such as the city centre, Lansdown, Camden, Widcombe and Combe Down, and can bag a bargain and then wait to take advantage of any market improvements over the next few years. So my advice to anyone wanting to secure an investment property in Bath is don’t panic. When the going gets tough, make sure you seek expert advice and employ the best independent agent in Bath to work on your behalf and secure new rental property for you in places you could not previously afford.

Happy hunting!

Fiona Patton
Head of Lettings

Fiona Patton Pritchards Lettings

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