A recent survey from the Royal Institution of Chartered Surveyors (RICS) and Pricewaterhouse Coopers (PwC) states that almost 1.8 million new rental homes are needed by 2025 to keep up with current demand from tenants.
Some commentators predicted last winter that the buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market.
If the RICS and PwC are indeed correct, what does this mean for Boston? The fact is, as a country, we are facing a precarious rental shortage and a need to get Boston building in a way that benefits a cross-section of the Boston society.
Of the 17,600 households in Boston, currently 9,200 tenants live in 3,400 private rented properties. If we apportion those 1.8 million households equally around the Country, that means in nine years’ time, the number of rental properties in Boston needs to rise by 1,400 = 42%, taking the total number of rented properties in the city to 4,800.
“That means Boston landlords need to buy around 200 properties a year between now and 2025 to meet that demand”
According to my calculations, an additional 3,900 people will want to live in all those ‘additional’ Boston rental properties – so why is the government penalising landlords?
Thankfully the new housing minister Gavin Barwell detached Teresa May’s new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying “we need to build more homes for every single type of person needing a home and not focus on one single tenure”. The private rented sector became a stooge under David Cameron’s watch and still, with increasingly unaffordable Boston house prices, the majority of new Boston households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Boston society who are already struggling. Let’s hope this new Government continues to see the contribution landlords give to the country as a whole.
As I am sure you are aware, we at Hill and Clark, are always happy to cast our eyes over any potential buy to let purchase in Boston. If you would like to benefit from getting some free and impartial but relevant advice then please feel free to contact our Boston office on 01205 352019