Business Week: Lincoln bucks the buy-to-let slump

Continued demand for accommodation for students and young professionals is keeping the Lincoln buy-to-let market above the national trend — and rents have increased over the past year in the city too.

But that’s not the picture many buy-to-let landlords have seen across the wider region and the country. Rightmove figures show a less active buy-to-let market led properties with two bedrooms or fewer to drop in price last month. And stats from Hampton International show that money spent on buy-to-let purchases across the UK is currently 30% below what it was in 2015, when the 3% stamp duty surcharge on purchases of second homes was introduced.


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At the height of the buy-to-let boom, first-time buyers who were able to get a 10% deposit together frequently found themselves outbid by buy-to-let landlords. Rightmove said mortgage approvals for new buy-to-let purchases are 14% down on a year ago and 53% down on three years ago as the more punitive tax regime has had “its desired effect”.

Yet warnings by landlords that taxes on buy-to-let would cripple the property market, driving down supply and pushing up rents, have turned out to be hollow, according to research by campaign group Generation Rent. They found that since the introduction of taxes on buy-to-let landlords in George Osborne’s 2015 budget, rents have fallen in real terms by 2.8%.

“Residential property prices continued to show gradual growth over the last 12 months, in Lincoln and the East Midlands,” explained Hymie Bentley, Associate Partner at Mundys, who also heads the lettings department. “We expect that residential property will continue to show a positive trend in Lincoln and the surrounding areas, and buy-to-let property remains attractive for investors in and around the city,” he added. “If there is less activity in the market from buy-to-let Investors, it will reduce the amount of competition for similar properties and therefore provide more of an opportunity for first time buyers.”

That rings true alongside Rightmove’s predictions, which indicate subdued prices provide first-time buyers with an “opportunity this autumn”. The number of first-time buyers a year has grown by 21% since Osborne’s first announcement on landlord taxation in July 2015, to 366,000 in the year to June 2018. Mundys correlated this trend to Lincoln too in mid September, as the construction market remained steady in our region.

Workloads continue to grow in the UK construction and infrastructure sector, amid financial constraints and Brexit uncertainties, according to the Q3 2018 RICS UK Construction and Infrastructure Market Survey. Near term, the outlook for the sector remains upbeat, but 2019 might bring an entirely different narrative.


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