Plans for the controversial third runway at Heathrow Airport have been approved by the Government - but what does this mean for landlords?
For those who own a property within the compulsory purchase zone there is the offer of the market value being paid out plus an amount on top.
But for surrounding properties that remain, there will be fears around disruption during construction in the more immediate term and increased noise pollution over the longer term.
Landlords will need to consider these issues and how they impact on their investment.
Mark Hayward, chief executive of NAEA Propertymark, said: “While a third runway will bring Heathrow’s surrounding areas better infrastructure and accessibility in the long-term, there will be a period of disruption while it’s being built.
He added that the significant increase in the number of low-flying aircraft would likely be detrimental to the communities in the surrounding area.
“As a result, house prices are likely to fall for neighbourhoods close to the airport and on the flight path. It’s hard to give an exact figure as to how much they will drop by, but it’s likely to be quite significant.”
However, it is not all bad news, as falling prices could spell out an improved situation for certain landlords.
Assuming that demand for rental properties in the area remains strong, the fall in house prices could make for good buy-to-let investments. The lower the initial cost of properties in the area, the higher the rental yields, so if you’re looking to add to your portfolio, it’s worth keeping an eye on how things develop.
Adam Male, director of lettings at urban.co.uk, explains: “A combination of market uncertainty and political upheaval, along with the impending introduction of a ban on letting fees, has seen the buy-to-let market remain static across much of the capital.
“That said, while the third runway will no doubt dampen the appetite of long-term homebuyers around Heathrow, the demand for rental properties should remain consistently strong.”
He added that the short-term also looks good for landlords in the area, as those looking to work at Heathrow or on the expansion will likely remain undeterred by the changes. He expects the high demand to see rental prices increase.
“In addition, if the sales market takes a hit and prices fall as a result, the area will become even more desirable for those getting on the buy-to-let ladder, due to the increase in rental yields from falling prices and increasing rents.”
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