Autumn Statement Our Thoughts

Everyone has had their say about the Autumn Statement so we are going to have ours from the perspective of Investment in the North West as we see it. The views expressed here are our own.

The Chancellor has done nothing to ease the pressure on small Landlords. Actually, he has ramped up the pressure by saying he is looking for ways to tax companies who might own buy to lets much more harshly possibly treating them as if privately owned. That would be a serious blow

Banning tenant’s fees by letting agents is also seen as a hostile move for the Buy to Let Sector although its impact I think is less of a problem in practice. But it shows how the Government is thinking.

The hopes that the Government might abandon the 3% stamp duty surcharge or the restriction of relief on interest payments has been well and truly dashed. No one now I think sees this as a likely prospect.

This means the Buy to Let landlords under most pressure i.e. in London and the South face a very tough time and I suspect far fewer will want to join their ranks so putting more pressure on them if prices fall. Maybe it will help rents go up but maybe not if they are slowing anyway

To us however this makes the case for investing in the North-West look much more attractive for those who want to invest in Property. The cost of entry is so much lower, the yields so much higher and the possibility of future growth from where we start today more likely because there has been no such growth for years. Anyone buying into London is buying at the top in our view. In the North West you are still buying in at the bottom.

That possibility significantly increases if London is no longer attractive. Because we believe the money for Investment is still there and we do not think that Brexit or the economic prospects are going to diminish the amount of money searching for a home. It must go somewhere. If even a small % is diverted from the massive market in London to the much smaller market up here it will really have an impact.

The Chancellor has also affirmed his commitment to the Northern Powerhouse. That is excellent news for us.  If the economy is to be rebalanced, then surely the disparity between two houses (which are essentially the same property in terms of their build but only differ by virtue of their location) one costing £80,000 in Liverpool and one £800,000 in London will also be rebalanced. Is it completely inconceivable that the London property could fall to £600,000 and the Liverpool one rise to £200,000?   We are NOT saying this will happen but who knows?  If it did it would not happen overnight but over 5 to 10 years? That would certainly be an added bonus for properties purchased with a great yield today.

So overall not a good budget for most Buy to Let Investors but actually not bad one for us so we cannot complain.

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