Slowing Tamworth Property Market? Yes and No!

My thoughts to the landlords and homeowners of Tamworth…

The tightrope of being a Tamworth buy-to-let landlord is a balancing act many do well at. Talking to several Tamworth landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Tamworth landlords as average Tamworth rents have been on a downward trend recently. So look at the figures here…

Rents in Tamworth on average for new tenants moving in have risen 2.7% for the month, taking overall annual Tamworth rents 2.4% higher for the year

However, several Tamworth landlords have expressed their apprehensions about a slowing of the housing market in Tamworth. I think this negativity may be exaggerated.

Before we get the Champagne out, the other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Tamworth as well as the Tamworth buy-to-let landlords).  I believe the Tamworth property market has been trying to find some level of equilibrium since the New Year.  According to the Land Registry…

Property Values in Tamworth are 8.2% higher than they were 12 months ago, rising by 2.51% last month alone!

Property values and rents in Tamworth
Property values and rents in Tamworth

Yet, I would take those figures with a pinch of salt as they reflect the sales of Tamworth properties that took place in early Spring 2017 and now are only exchanging and completing during the summer months.

The reality is the number of properties that are on the market in Tamworth today has risen by 20% since the New Year and that will have a dampening effect on property values. As tenants have had less choice, buyers now have more choice … and that will temper Tamworth property prices as we head towards 2018.

Slowing property market?

Be you a homeowner or landlord, if you are planning to sell your Tamworth property in the short term, it is crucial, especially with the rise in the number of properties on the market, that you realistically price your property when you bring it to the market … with the increase in choice of properties, the balance of power during negotiation generally sways towards the buyer. Given that everyone now has access to property details, including historic stats for how much property have sold for, they will be more astute during the offer and negotiation stages of a purchase.

However, even with this uplift in the number of properties for sale in Tamworth, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 1,386 properties for sale compared to the current level of 360 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).

Compared to 2008, today’s lower supply of Tamworth properties for sale will keep prices relatively high…and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

Some final thought’s before I go – to all the Tamworth homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving … most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)

To all the Tamworth landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Tamworth Property Blog … https://www.tamworthpropertyblog.co.uk

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

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

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

 

Ask lorraine – My Tamworth tenants may have sub let, what are my responsibilities?

Tamworth’s New 3 Speed Property Market

“What’s happening to the Tamworth Property Market” is a question I am asked repeatedly.  Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Tamworth property market – but many small micro-property markets?

According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the town.

For ease, I have named them the …

  1. lower’ Tamworth Property Market.
  2. lower to middle’ Tamworth Property Market.
  3. ‘middle’ Tamworth Property Market.

    Tamworth's 3 speed local property market
    Tamworth’s 3 speed local property market?

The ‘lower’ and ‘lower to middle’ sectors of the Tamworth property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Tamworth property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Tamworth property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.

Some of you may be interested to know how I have classified the three sectors ..

  1. lower’ Tamworth housing market – the bottom 10% (in terms of value) of properties sold
  2. lower to middle’ Tamworth housing market – lower Quartile (or lowest 25% in terms of value) of properties sold
  3. middle’ Tamworth housing market – which is the median in terms of value
Change in house prices in Tamworth borough Council area between 1995 and 2017
Change in house prices in Tamworth borough Council area between 1995 and 2017

 

 

 

 

 

…. and if one looks at the figures for Tamworth Borough Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.

Tamworth Borough Council Property Market – Sold Prices Price Paid in 1995 Price Paid in 2017 Percentage Uplift

1995 – 2017

Lower (Bottom 10%) £32,000 £110,000 243.75%
Lower to Middle (Lower Quartile) £39,000 £131,000 235.90%
Middle (The Median) £49,954 £178,445 257.22%

You can quite clearly see that it is the ‘middle’ market that has performed the best.

You might ask, what do all these different figures mean to homeowners and landlords alike?  Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘lower to middle’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘middle’ market percentage uplift), to the ‘lower to middle’ 1995 housing market figure, the 2017 figure of £131,000, would have been £139,316 instead.

Now, I have specifically not mentioned the upper reaches of the Tamworth housing market for several reasons.  Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Tamworth’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Tamworth property market – looking at the stats for the up-market Tamworth property market from Land Registry, only 6 properties in Tamworth (and a 3 mile radius around it) have sold for £1,000,000 or more since 1997.

Uplift percentage
uplift percentage

So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Tamworth Property Market, but many Tamworth “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared in my Property Blog and to my landlord database, especially in the ‘lower’ and ‘lower/middle’ market. If you want to be kept informed of those buy to let bargains, have a look at my blog  .. https://www.tamworthpropertyblog.co.uk  it’s free to do so and I’m sure you wouldn’t want to miss out – would you?

I would love to know if you have spotted any micro-property markets in Tamworth.

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.

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

http://www.hallandthompson.co.uk

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

Are there any pitfalls of selling a house in tamworth that’s in need of modernisation?

When you  come to sell or purchase a house the location is probably the most important factor with the condition coming in a close second. It’s these factors that determine the value of a property and how much one is willing to pay to live there.

location location location
l

 

We have most likely all seen the property programmes on television and with Homes under the Hammer being as popular as every, many people are either looking to add to their retirement pot after the government stuffed us  big time or they are hoping to become property tycoons.

Sellers need to consider a few simple things when selling a property in need of refurbishment i.e clearing up the gardens – that foot high grass will put prospective buyers off. How about ensuring there are no rusting cars  on the driveway, discarded or broken childrens toys  or bins overflowing with rubbish. You get the idea! inexpensive but certainly worthwhile small things, can be be carried out to ensure the front of the property alone does not deter potential buyers from crossing the threshold.

Are the renovation works likely to exceed  several thousand pounds and is the write up on the property a true and factual piece of writing.

It doesn’t matter what price the vendor is hoping to achieve, if the surveyor has no comparable prices to work on, the property may be down valued and the purchaser may struggle to acquire the mortgage required on the property.

So now you have a few very interested parties, which way do you turn, who’s going to be your choice of the day.

If you are selling your property through an agent, the agent must carry out due diligence on the buyers market position – do they have a property to sell and if so is it being marketed  yet. Do they require a mortgage, have they a mortgage in principal already. Are they experienced at refurbishing properties and the bigger picture – do they have planning consent for their 10 bed home of multiple occupation? A good agent will find out as much information as possible about the buyer and what they are hoping to achieve with the property.

The seller will have then have a uniformed approach on each prospective buyer and be able to make their decision based upon the information from the agent.

Which ever purchaser you decide to go with, there are no guarantees that things will run smoothly from start to finish or that they will not pull out of the transaction, you can only do your best and choose an agent that works for you.

Happy days.

 

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!

http://www.Tamworthpropertyblog.co.uk

https://www.facebook.com/hallandthompsonestateagents

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

 

 

Tamworth Homeowners and their £1.19 billion Debt

Over the last 12 months, the UK has decided to leave the EU, have a General Election with a result that didn’t go to plan for Mrs May and to add insult to injury, our American cousins elected Donald Trump as the 45th President of the United States. It could be said this should have caused some unnecessary unpredictability into the UK property market.

The reality is that the housing and mortgage market (for the time being) has shown a noteworthy resilience. Indeed on the back of the Monetary Policy pursued by the Bank of England there has been a notable improvement of macro-economic conditions! In July for example it was announced that we are witness to the lowest levels of unemployment for nearly 50 years. Furthermore, despite the UK construction industry building 21% more properties than same time the previous year, there has still been a disproportionate increase in demand for housing, particularly in the most thriving areas of the Country. Repossessions too are also at an all-time low at 3,985 for the last Quarter (Q1 2017) from a high of 29,145 in Q1 2009. All these things have resulted in…

Property values in Tamworth according to the

Land Registry are 7.34% higher than a year ago

So, what does all this mean for the homeowners and landlords of Tamworth, especially in relation to property prices moving forward?

One vital bellwether of the property market (and property values) is the mortgage market. The UK mortgage market is worth £961,653,701,493 (that’s £961bn) and it representative of 13,314,512 mortgages (interestingly, the UK’s mortgage market is the largest in Europe in terms of amount lent per year and the total value of outstanding loans). Uncertainty causes banks to stop lending – look what happened in the credit crunch and that seriously affects property prices.

Roll the clock back to 2007, and nobody had heard of the term ‘credit crunch’, but now the expression has entered our everyday language.  It took a few months throughout the autumn of 2007, before the crunch started to hit the Tamworth property market, but in late 2007, and for the following year and half, Tamworth property values dropped each month like the notorious heavy lead balloon, meaning …

The credit crunch caused Tamworth property values to drop by 16.8%

Under the sustained pressure of the Credit Crunch, the Bank of England realised that the UK economy was stalling in the early autumn of 2008. Loan book lending (sub-prime phenomenon) in the US and across the world was the trigger for this pressure. In a bid to stimulate the British economy there were six successive interest rates drops between October 2008 and March 2009; this resulted in interest rates falling from 5% to 0.5%!

Thankfully, after a period of stagnation, the Tamworth property market started to recover slowly in 2011 as certainty returned to the economy as a whole and Tamworth property values really took off in 2013 as the economy sped upwards. Thankfully, the ‘fire’ was taken out of the property market in Spring 2015 (otherwise we could have had another boom and bust scenario like we had in the 1960’s, 70’s and 80’s), with new mortgage lending rules. Throughout 2016, we saw a return to more realistic and stable medium term property price growth. Interestingly, property prices recovered in Tamworth from the post Credit Crunch 2009 dip and are now 41.9% higher than they were in 2009.

Tamworth property values before & after the credit crunch
Tamworth property values before & after the credit crunch

Now, as we enter the summer of 2017, with the Conservatives having been re-elected on their slender majority, the Tamworth property market has recouped its composure and in fact, there has been some aggressive competition among mortgage lenders, which has driven mortgage rates down to record lows. This is good news for Tamworth homeowners and landlords, over the last few months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.  For example, last month, HSBC launched a 1.69% five-year fixed mortgage!

Interestingly, according to the Council of Mortgage Lenders, the level of mortgage lending had soared to an all-time high in the UK.

In the Tamworth postcodes of B77, B78 & B79, if you added up everyone’s mortgage, it would total £1,199,374,481!

Since 1977, the average Bank of England interest rate has been 6.65%, making the current 323 year all time low rate of 0.25% very low indeed. Thankfully, the proportion of borrowers fixing their mortgage rate has gone from 31.52% in the autumn of 2012 to the current 59.3%. If you haven’t fixed – maybe you should follow the majority?

In my modest opinion, especially if things do get a little rocky and uncertainty seeps back in the coming years (and nobody knows what will happen on that front), one thing I know is for certain, interest rates can only go one way from their 300 year ultra 0.25% low level … and that is why I consider it important to highlight this to all the homeowners and landlords of Tamworth. Maybe, just maybe, you might want to consider taking some advice from a qualified mortgage adviser? There are plenty of them in Tamworth.

If you are interested in the Tamworth Property Market, you might learn something by visiting the blog. https://www.tamworthpropertyblog.co.uk

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

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

https://www.linkedin.com/in/lorrainethompson2/

 

Tamworth Landlords – The importance of vetting your tenants

Landlords, It is vital that tenants are thoroughly vetted, after all you are running a business…ASK THE TAXMAN!  You are putting strangers in your property, therefore, it is how they sound on paper and not how nice and suave they appear. Hopefully Jack the Ripper won’t be moving into your abode!

axe murderer
axe murderer

 

 

 

 

 

 

A quick reminder of vetting checks to carry out:-

  • Employers reference
  • Last quarter bank statements
  • Proof of address- ask for a recent utility bill to check against other documents
  • Credit checks – CC J’s or bankruptcy
  • Photo I.D Drivers Licence or Passport
  • Current/Previous Landlord reference

These precautions will give you the best protection, if any prospective tenant cannot produce this information then alarm bells should start ringing.  Regardless of the tenant’s status, whether they are employed or in full-time education, you need to make an informed decision about whom you accept as a tenant, therefore make NO compromises on referencing.

I’ve covered many times, the legislation hoops  (right to rent checks) landlords have to jump through, full details can be found at this link https://www.gov.uk/government/news/right-to-rent-checks-what-they-mean-for-you 

As Paddy McGuinness says “No Likey, No lighty”

Until next time.

 

 

Supply and Demand Issues mean Tamworth Property Values Rise by 7.34% in the Last 12 Months

The most recent set of data from the Land Registry has stated that property values in Tamworth and the surrounding area were 7.34% higher than 12 months ago and 22.36% higher than January 2015.

Despite the uncertainty over Brexit as Tamworth (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Tamworth property market can also be seen from those two sides of the story.

Looking at the supply issues of the Tamworth property market, putting aside the short-term scarcity of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.

The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – its one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly boxes and high-rise flats in the Yorkshire Dales, nor blot the landscape with the building of massive out of place ugly 1,000 home housing estates around the beautiful countryside of such villages as Elford and  Middleton.

Land usage
Land usage

 

 

 

 

 

 

 

 

 

The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Tamworth badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimbyism  (the not in my back yard approach) and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.

Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.

The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Tamworth saw in property values was just 16.85% in the 2008/9 credit crunch.

Despite the slowdown in the rate of annual property value growth in Tamworth to the current 7.34%, it can be argued the headline rate of Tamworth property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Tamworth (and the UK).

For more thoughts on the Tamworth Property Market, please visit the Tamworth Property Market Blog https://www.tamworthpropertyblog.co.uk

If you are a landlord or thinking of becoming one for the first time, then feel free to get in touch. If  you want to read more articles like this about the Tamworth Property Market, why not subscribe to our blog or newsletter.

Together with regular postings on what I consider the best buy to let deals in Tamworth, irrespective of which agent is selling it, you will also find hints and tips.

https://www.linkedin.com/in/lorrainethompson2/

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

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

https://twitter.com/hallandthompson

How to be a strict but fair Tamworth landlord

So you want to be a Landlord who is revered by your tenants but are not seen as a pushover, do you?

There are a  few tips that I would recommend to hopefully give you an easier life as a landlord.

landlords tips
landlords tips

 

 

 

 

 

Communicating with tenants:

  • Set out ground rules and stick to them, not letting tenants call  you at 11pm – to ask a stupid question.
  • Writing is better than phoning but remember to keep copies.
  • Try and accommodate the tenants wishes to make contact   – messenger, email, text or even Facebook.
  • Why not syke them instead of giving out your phone number.
  • Ensure your AST covers all bases concerning communicating.

Late rental payments: 

  • Help tenants set up a standing order or use direct debit – they can’t forget to make payment.
  • Diarise rent date and make contact on the same day if it’s not forthcoming.
  • Set up a process and stick to it  e.g. text day 1 and 2, call day 3 and 4 and final warning day 5 or 6.
  • Do not be a soft touch and fall for those tales of woe.

Emergencies:

  • What is an emergency, your definition is probably not the same as your tenants – So define “emergency” for your tenants.
  • Instruct tenants about what to do in an emergency. Do they really need to call you!
  • Consider landlord emergency cover.

Dealing with routine maintenance:

  • Have a good all round base of trade contacts ensuring they are paid on time and treated fairly.
  • Can the tenant sort out the issue easily themselves without calling you out – e.g. unblock the sink or clean the washing machine filter.
  • Explain clearly the difference between condensation and damp, let the tenant know their responsibilities to both.
  • Carry out regular internal and external  inspections and look for early signs of repairs, often cheaper than letting things go.

Inspection visits:

  • Test smoke/carbon monoxide alarms.
  • Look for any signs of condensation.
  • Visually inspect electrics.
  • Looks for signs of sub letting.
  • Look for early signs of repairs that may be required.

Conclusion:

  • Be proactive  and not reactive.
  • Work smart and not hard.

“People who work hard and people who work smart have different measures of success.” Jacob Morgan

work smart not hard
work smart not hard

 

 

 

 

 

 

 

 

 

If you enjoyed reading my article, feel free to take a look my other online resources below:

Hall and Thompson Estate Agents Tamworth Youtube Channel https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

Follow The Buy-To-Let Property Investment Market in Tamworth   https://www.tamworthpropertyblog.co.uk

Lorraine’s Tamworth Property Market LinkedIn Page https://www.linkedin.com/in/lorrainethompson2/

Hall and Thompson Estate Agents Tamworth Facebook Page https://www.facebook.com/Hallandthompsonestateagents/

Tamworth Hall and Thompson Estate Agents Twitter Page    https://twitter.com/hallandthompson