Otley house prices since the Millennium have risen by 125.07%, whilst average salaries in Otley have only grown by 51.27% over the same time frame.
This has served to push homeownership further out of reach for many Otley people as they have to battle against raising considerable deposits and meet sterner lending criteria, as a result of new mortgage regulations introduced in 2014/5. The private rental market in Otley has grown throughout the last 20 years with buy-to-let investors purchasing a high proportion of newly built residential properties that were built and designed for the owner occupier sales markets. For example, in Otley, roll the clock back 20 years and there were 5,839 properties in the Constituency, whilst the most recent set of figures show there are 6,378 properties - a growth of 539 properties.
However, anecdotal evidence suggests that a large majority of those 539 were bought by Otley buy-to-let landlords, as over the same 20-year time frame, the number of rental properties has grown from 238 to 717 in the Constituency - a rise of 479 properties. Nevertheless, some say this historic growth of the Otley rental market might start to change with the new tax rules for landlords introduced by Mr Osborne over the last seven or eight months. Yet the numbers tell another story. Across the board, mortgage borrowing climbed to a 9 year zenith in March this year as the British property markets traditional Easter rush corresponded with landlords hurrying to beat George Osborne’s new stamp duty changes – buy-to-let landlords borrowed £7.1bn in March 2016 (the latest set of figures released) which was 163% up on the £2.7bn borrowed in the previous March. You see, from my point of view, I don’t think things will get worse in the buy-to-let market in Otley and these are the reasons why I believe that: Firstly, what else are Otley landlords going to invest in if it isn’t property - the stock market? Since the Millennium, the stock market has risen by an unimpressive total of 5.54%, quite different to the 125.07% rise in Otley property prices?
Secondly, it’s true the 3% stamp duty is the first blow on top of a number of other tax changes to be phased in between 2017 and 2021, such as landlords facing a constraint in their ability to offset mortgage interest and, if sizeable numbers of landlords do take the decision to sell their portfolios, this will lead to a substantial amount of second hand properties being put up for sale.
Yet that might not be a bad thing, as there is a serious shortage of properties to buy at the moment in Otley: the stock of property for sale being at a six year all time low. Thirdly, if there are fewer rental properties in Otley, as supply drops and demand remains the same (although ask any letting agent in Otley and they will say demand is constantly rising) this will create a squeeze in the Otley rental market and as a result rents will rise. In fact, I predict even if landlords don’t sell up, Otley rents will rise as Otley landlords seek to compensate for increased costs, which means more landlords will be attracted back. Written by Lester Hurst, of Hunters.For more thoughts on the Otley Property market to read articles like this, you might find the Otley Property Market blog of interest www.wharfevalleypropertyblog.co.uk.