They say bad news sells newspapers so the national press were quick to spot an opportunity in George Osbourne’s July budget in which he declared that he will start to scale back, from 2017, the tax relief that those high-income tax rate buy-to-let landlords in Mid-Somerset with a mortgage have benefited from.

A national tabloid ran headlines stating it was the end of the private landlord; predicting many investment landlords will give up on buy-to-let altogether and we will be inundated with rental properties up for sale as Mid-Somerset landlords feel squeezed out from the property market. Here in Glastonbury we have not seen a marked increase in properties for sale.

Even Mr Carney, the Governor of the Bank of England, recently cautioned that the buy-to-let property market could destabilise the whole UK property market.

He was concerned that investment landlords who bought with high loan to value mortgages could be spooked if there is a property crash, they would panic because of negative equity, sell cheaply, which would worsen house price falls.

Before landlords decide to sell up and head for the Outer Hebrides I think we need to consider some of the positives about the state of the Mid-Somerset property market.

The majority of my own clients who bought buy-to-let properties bought them mortgage-free, so they won’t be affected by the Chancellor’s taxation changes.

Also, something I feel is often overlooked but very important, is the fact that Mid-Somerset landlords have only been able historically to borrow up to 75% of the value of the rental property.

In the last property crash of 2008, average property values dropped by the not-so-insignificant figure of 14.2% in Glastonbury for example, but even then, when we had the credit crunch and the world’s banking sector was on the brink, no Mid-Somerset buy-to-let landlord would have been in negative equity.

I believe we have a case of ‘bad news selling newspapers’ and I believe that buy-to-let investment in Mid-Somerset will carry on relatively intact.

It’s true, reducing tax relief will hit Mid-Somerset landlords who pay the higher rate of income tax, and this may slightly diminish buy-to-let as an investment vehicle, but I doubt people will sell en-masse.

You would never dream of investing in the stock market without doing your homework and talking to people in the know. If you want to make money in the Mid-Somerset property market as a buy-to-let landlord, it’s all about having the right property and as you grow, the right portfolio mix to offer a balanced investment that will give you both yield and capital growth.

The Mid-Somerset buy-to-let market still offers good investment opportunities to new and old alike and property management and landlord services in the area are busier than ever.

Those who have bought in the last 12-18 months have reaped the benefit from buying in Mid-Somerset. Taking Glastonbury as an example, the latest Land Registry data shows the average price paid for a property in the last 12 months has risen to a high of £245,181 but I cannot stress enough the importance of doing your homework as many Glastonbury landlords have been lazy with their investments, buying with their heart and not their head.

About Tom Morgan

Founder of Jungle Property the multi award-winning letting agent based in Glastonbury, Somerset. I am passionate about property and Glastonbury and about providing the very best advice to anyone who wants the best return on a buy-to-let property investment. For an open and brutally honest opinion on anything in the Glastonbury property market please contact me via tom.morgan@jungleproperty.co.uk

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