Tamworth’s ‘Generation Trapped’ and the £3.77bn legacy

 

Last week, I wrote an article on the plight of the Tamworth 20 something’s often referred to by the press as ‘Generation Rent’. Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow substantially by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

However, my real concern for Tamworth homeowners and Tamworth landlords alike, as I discussed a couple of months ago, is our mature members of the population of Tamworth. In that previous article, I stated that the current OAP’s (65+ yrs in age) in Tamworth were sitting on £1.43bn of residential property … however, I didn’t talk in depth about the ‘Baby Boomers’, the 50yr to 64yr old Tamworth people and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger Generation Renters.

In Tamworth, there are 6,042 households whose owners are aged between 50yrs and 64yrs and about to pay their mortgage off. That property is worth, in today’s prices, £1.21bn. There are an additional 5,570 mortgage free Tamworth households, owned by 50yr to 64yr olds, worth £1.12bn in today’s prices, meaning…

Tamworth Baby Boomers and Tamworth OAP’s are sitting

on £3.77bn worth of Tamworth Property

Tamworth property

Tamworth property  these Tamworth Baby Boomers and OAP’s are sitting on 18,701 Tamworth properties and many of them feel trapped in their homes, and hence I have dubbed them ‘Generation Trapped’.

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are ‘under-occupied’ (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggest in Britain it’s estimated that only one in ten older people downsize while in the USA for example one in five do so.

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to declutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

Helping mature Tamworth (and the Country) homeowners to downsize at the right time will also enable younger Tamworth people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these ‘last time buyers’.

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Tamworth and the Planning Dept. should play their part, as should landlords and property investors to ensure Tamworth’s ‘Generation Trapped’ can find suitable property locally, close to friends, family and facilities.

If you spot a property and would like a second opinion then feel free to get in touch with me. My only interest is to make sure you get the best outcome from your investment. Rest assured I have no motive to try and sell you a house and I will not be biased towards any one vendor.

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch!

Email me on Lorraine@hallandthompson.co.uk or call on 07531484956.

Don’t forget to visit the links below to view back dated deals and Tamworth Property News. https://www.tamworthpropertyblog.co.uk

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Ask Lorraine – A couple have rented my house and the man who was the only one on the tenancy has done a runner, help

🙋  Landlord’s Question: 

”Dear Lorraine,

I’m a private Tamworth landlord. A couple have been renting my house since 2009 and the man who was the only one named on the tenancy has left the property, help!

I’m too old for this hassle and I’ve decided to sell up. The lady doesn’t hold a contract so can I just tell her to go. He left 3 months ago and she’s been struggling to pay the rent ever since, she has no idea where he’s living.

I'm a Tamworth Landlord
I want my property back

 

Lorraine’s Answer

It sounds as though you have created a verbal tenancy with the lady as you have been accepting her rent. I would suggest serving a section 21 notice giving  at least  2 months notice to quit.

You will need to ensure that the gas safety certification, EPC,  “how to rent guide” is served first, don’t forget to get the ladies signature confirming receipt of said documents.

The section 21 cannot be served during the first four months of a tenancy so you will need to wait another month, at least.

In the meantime try to help the lady find alternative accomodation, after all it’s not her fault that her partner has left her in this mess.

Until next week.

 

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch!

lorraine@hallandthompson.co.uk

http://www.hallandthompson.co.uk

https://www.facebook.com/Hallandthompsonestateagents/

https://www.facebook.com/groups/1627669040852754/

‘Generation Rent (Forever)’ – 2,961 Tamworth Tenants have no intention of ever buying a property to call home

Generation rentThe good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts … those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Tamworth (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Tamworth property ladder.

However, I would say there has been something else at play other than the issue of raising a deposit – having sufficient income and rising property prices in Tamworth. Whilst these are important factors and barriers to home ownership, I also believe there has been a generational change in attitudes towards home ownership in Tamworth (and in fact the rest of the Country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Tamworth population choose to be tenants as it better suits their plans and lifestyle. Local Government in Tamworth (including the planners – especially the planners), land owners and landlords need an adaptable Tamworth residential property sector that allows the diverse choices of these Tamworth 20 and 30 year olds to be met.

This means, if we applied the same percentages to the current 7,711 Tamworth tenants in their 3,300 private rental properties, 2,961 tenants have no plans to ever buy a property – good news for the landlords of those 1,267 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

.. but does that mean the other third will be buying in Tamworth in the next 12 months?

Who is planning to buy a Tamworth property soon

Tamworth Tenants

Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.  The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Tamworth, we will in fact need an additional 1,414 private rental properties over the next eight years (or 177 a year) … meaning the number of private rented properties in Tamworth is projected to rise to an eye watering 4,714 households.

For more insight and thoughts like this on the Tamworth Property Market – please visit the Tamworth Property Blog at https://www.tamworthpropertyblog.co.uk

Are you looking to get into the rental market, have you seen a property and you’re not sure if it’s a good buy? Why not give me a call to discuss 01827 425195 or email me  lorraine@hallandthompson.co.uk

http://www.hallandthompson.co.uk

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Ask Lorraine – Legionella Certification. Surely, this isn’t a legal requirement for landlords?

🙋  Landlord’s Question: 

”Dear Lorraine,

I’ve just been talking to another landlord and he asked who I use to carry out my Legionella certification?  Surely he’s mistaken, this isn’t a legal requirement for landlords? If it is, why hasn’t it been all over the press.

Legionella
Surely I don’t have to do this?

Lorraine’s Answer

Yes, this is a legal requirement, it started to apply for normal domestic properties in 2013. Guidelines state that the risk assessment must be carried out by a competent person, so there is no reason why you as that person cannot complete this yourself.

Review the risk assessment regularly as a matter of course and update it, should things change.

Simple control measures can help control the risk of exposure to legionella such as:

  • flushing out the system prior to letting the property
  • Cold water tanks should have tight fitting lids thus avoiding debris getting into the system
  • setting control parameters  to ensure water is stored at 60°C)
  • make sure any redundant pipework is removed

Why not send your tenants regular do’s and  don’ts information sheets on the control of legionella,  get them involved.

  • do clean  shower heads on a regular basis
  • do inform the landlord if the hot water is not heating correctly
  • don’t adjust temperature control settings of the calorifier
  • do run taps and shower heads if you leave the property empty more than a few weeks

To read more  HSE guidlines click   http://www.hse.gov.uk/legionnaires/legionella-landlords-responsibilities.htm

Until next week.

 

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch!

lorraine@hallandthompson.co.uk

http://www.hallandthompson.co.uk

Click the Link to join. Tenants and landlords welcome –

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Tamworth First Time Buyers borrow £55.9m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Tamworth property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 1,165 properties have sold (and completed) in Tamworth, worth £223.8m. Interestingly the number of properties changing hands in Tamworth has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Tamworth buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Tamworth property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Tamworth itself, first time buyers have borrowed more than £55.9m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Tamworth economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at the Tamworth market, at this moment in time there are an impressive 300 properties for sale, so lots of choice. All this will be welcome news amongst Tamworth first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Tamworth property market like this, you might want to visit the Tamworth Property Market Property Blog www.tamworthpropertyblog.co.uk

If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property.

Email me on lorraine@hallandthompson.co.uk or call on 01827 425195

http://www.hallandthompson.co.uk

 https://www.facebook.com/hallandthompsonestateagents

https://twitter.com/hallandthompson

BTL yield 5.57% Cracking Bungalow, Tamworth B79

Walking through Tamworth yesterday I spotted what looks like a cracking good Buy To Let so I thought I would share it with you.

This 2 bedroom semi-detached bungalow  is up for sale with our good friends at Hunters and has recently been reduced – Offers in Region of £139,950

Don’t forget to visit the links below to view back dated deals and Tamworth Property News. https://www.tamworthpropertyblog.co.uk

 https://www.facebook.com/hallandthompsonestateagents

https://twitter.com/hallandthompson

With 7,711 people in Private Rented Properties in Tamworth – Should you still be investing in Tamworth Buy To Let?

If I were a buy to let landlord in Tamworth today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Tamworth property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Tamworth property prices do drop, the downside to that is that first time buyers could be attracted back into the Tamworth property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Tamworth landlord, almost a blessing in disguise.

Tamworth has a population of 73,572, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

Tamworth – Accommodation Type and the Number of Occupiers
Owned outright – Tamworth Owned with a mortgage – Tamworth Shared ownership (part owned and part rented) – Tamworth Social rented (aka Council Housing) –  Tamworth Private rented – Tamworth Living rent free – Tamworth
16,678 34,977 315 13,432 7,711 459
22.7% 47.5% 0.4% 18.3% 10.5% 0.6%

Yields will rise if Tamworth property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Tamworth landlords add to their portfolio. Rental demand in Tamworth is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Tamworth landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I have just come back from a visit to my husbands relations after a family get together. I got chatting with my husbands nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Tamworth and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a 50 something, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 10.5% of Tamworth people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Tamworth – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

For more views and opinions on the Tamworth Property Market – visit the Tamworth Property Market Blog https://www.tamworthpropertyblog.co.uk

Give me a call or drop me an email lorraine@allandthompson.co.uk if you would like a chat or a cup of coffee and we can talk houses, houses, and more houses.

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Ask Lorraine – My tenant has refused to supply a forwarding address

🙋  Landlord’s Question: 

”Dear Lorraine,

My tenant has refused to supply a forwarding address, how can I  inform the relevant authorities if I don’t have the information?

My tenant has refused to supply a forwarding address

Lorraine’s Answer

I don’t know anywhere that says it’s a legal requirement to leave a forwarding address, however I’m a little concerned why the tenant did not feel able or want to give you this.

Did the tenancy end on friendly terms?

As a tenancy ends do you advise your tenants, that  in order to send mail on that has not been redirected, you require a forwarding address. It’s surprising the number of people who do not redirect mail!

Do you take a deposit – I’m sure the tenant would like their deposit back quickly. Then you require a forwarding address to enable you to complete the Deposit Return process forms. Without a forwarding address the deposit can take many months to be returned to either the tenant or landlord. I usually find that tenants are only too willing to give me their forwarding address where a deposit is involved.

If you do take a forwarding address, don’t forget to advise the utility companies including all meter readings and of course don’t forget to advise the local council so that they can chase any outstanding council tax.

Until next week.

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch! https://www.tamworthpropertyblog.co.uk

https://www.facebook.com/hallandthompsonestateagents

http://www.hallandthompson.co.uk

 

 

192 Tamworth Households Occupied by OAP Renters

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Tamworth, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Tamworth?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Tamworth at age 65 (years) is 18.4 years for males and 20.7 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Tamworth.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Tamworth?  Of the 7,239 households in Tamworth, whose head of the household is 65 or over, not surprisingly 5,236 of households were owned (72.33%) and 1,631 (22.53%) were in social housing.  However, the figure that fascinated me was the 192 (2.65%) households that were in privately rented properties.

Tenure: Owned; Tenure: Shared ownership (part owned and part rented); Tenure: Rented from council (Local Authority Tenure: Private rented; Tenure: Living rent free;
72.33% 0.26% 22.53% 2.65% 2.22%

Anecdotal evidence, by talking to both my team and other Tamworth property professionals is that this figure is rising.  More and more Tamworth OAP’s are selling their large Tamworth homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Tamworth OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.

Tamworth landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me  on lorraine@hallandthompson.co.uk or give me a call on 07531484956. We can always meet up for a chat and a coffee, we can even walk the dog.

My work experience person.

 

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