Private Renting in Gloucester increases by 279.2% in 20 years

You find me in a reflective mood today as I want to talk about the future of investing in property in Gloucester. The truth is that we have got fat and lethargic, with many people having mistaken the ever rising Gloucester (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 when making money from property was as easy

as falling off a log are sadly over.

Whilst George Osborne has 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. Remember, tenants will always want a roof over their head and I don’t see  HM 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,  ‘the more things change, the more they stay the same’. I mean, no one could have predicted how the property market has changed in Gloucester over the last couple of decades? Looking specifically at the Gloucester Parliamentary Constituency, twenty years ago, 30,438 households (meaning 73.36% of property) was owned and only 1,976 households were privately rented (meaning 4.76% of property was rented out by private landlords). Roll the clocks on twenty years and the change has been seismic …. Now only 30,416 of properties in the Constituency are home-owners (a huge drop to only 65.48% being owner occupied) and the jump in private renting has been out of this world, as 8,387properties are now privately rented proportionally 18.05%). (NB Neighbouring Constituencies show similar changes as well)

Who would have predicted in 1995 the private rental sector in

Gloucester would have grown by 279.2% in the following 20 years?

Also, if you had asked someone in 1995 to predict what would happen to property values over the next 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 Gloucester have increased over the last 20 years (between 1995 and 2015), but by a more modest 206.42% (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 and 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 Gloucester 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.

The advice I give to my landlords is this; these changes will make some landlords panic, meaning competition for decent Gloucester 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 Gloucester buy to let landlords to thrive in. If you want to learn more about the Gloucester Property Market feel free to get in touch.