Ask Lorraine – My Tamworth tenant is in substantial rent arrears

Do I still go to court
Do I still go to court

Ask Lorraine – I am in court in 3 weeks time over substantial rent arrears, if the tenants pay me before the court date do I still take them to court under Ground 11,  irregularity of payments or should I cancel the proceedings?

Thankyou V. T.

 

 

Lorraine’s Answer –  There are no refunds once you have paid the court fee, therefore, if your tenants did pay your outstanding rent, I would suggest you still continue with your court action.

scales of justice
scales of justice

We always put grounds 8, 10 and 11 –  you have all bases covered then,  just in case they do pay before the hearing.

If the tenants have paid, you probably won’t be awarded a possession order outright, most likely you will receive  a suspended order to see how they behave in the short term.

Usually when substantial arrears are owed, tenants do not pay up and it’s rare for them to turn up at court. Why not have your day in court, it’s a learning experience.

Until next week.

I’m regularly finding Buy to Let deals and posting these on the Tamworth Property Blog at https://www.tamworthpropertyblog.co.uk  Sign up for instant updates.

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The Tamworth House Price Index: 127.82

I had the most interesting conversation the other day with a local Tamworth accountant, who asked me about my articles on the Tamworth property market. It was quite humbling to be given praise by such a professional, when he commented enthusiastically on the articles I write. He was particularly interested with the graphs, facts and figures contained within them – so much so he recommended his clients read them, as most of them were either Tamworth homeowners, Tamworth landlords and a lot of the time – both. However, one question that kept me on my toes was, “With so many House-Price-Indices, how do you know which one to use and how can you calculate what is exactly happening in Tamworth?

To start with, there are indeed a great number of these Indices, including the Land Registry, Office of National Stats, Halifax, Nationwide and LSL to name but a few. The issue occurs when these different house price indices give diverse pictures of the state of the UK housing market. Whilst some indices measure the average value of every property in the UK (sold or unsold), others measure the average ‘price-paid’ of houses that happen to be sold over a fixed time scale… confusing isn’t it!

A lot of the variance between house price indices occurs because of the distinctive ways in which the numerous indices endeavour to beat these issues. You see, the biggest problem in creating a house-price-index when comparing and contrasting with most other indexes (e.g. inflation where the price a ubiquitous tin of Beans can easily be measured over the months and years), is every home is unique and as Tamworth people are only moving every 20 years, it appears the only thing that can be measured is the price of property sold in a given month.

By their very nature, all of the indices are only able to paint a picture of the whole of the UK or, at best, the regional housing market. As I have said many times in my articles on the Tamworth property market, it is important to look to the medium term when considering house price inflation/deflation. Looking at the month-to-month jumps, many indices look like one of those jumpy lie-detector needles you see in the cold war movies!

I can guarantee you in the coming few months, on a month-by-month basis, one or more of the indices will say property prices will have dropped. Let me tell you, no property market indices are representative of the housing market in the short term. Many indices have shown a drop around the Christmas and New Year months, even the boom years of 2001 to 2007 and 2013 to 2015.

So, back to the question, how do we work out what is happening in the Tamworth Property Market and can there be a Tamworth House Price Index?

To calculate what I consider is a fair and proper House Price Index for Tamworth, I initially needed to decide on a starting place for the index. I have chosen 2008 as far enough away, but still gives us a medium/long term view. Next, I split all the house sales into their types (Detached/Semi/House /Apartment) to give us an indication of what is actually selling by postcode district. So, for example, below is a table for the B77 postcode district (the sample shows 2008, 2016 and 2017.

  2008 2016 Proj 2017
Detached 23.0% 26.9% 27.1%
Semi Det 41.9% 40.6% 41.3%
Terraced 29.2% 26.7% 26.1%
Apartment 6.0% 5.8% 5.5%

Then I look at the actual numbers of properties sold in the B77 postcode district. Below is the graph with the numbers for the years already mentioned.

Next, I have looked at the prices paid for those types for every year since 2008, again in this example using the sample years of 2008, 2016 and 2017 for the B77 postcode.

Finally, I amalgamated the same data points for the other postcode districts covered by Tamworth and the surrounding villages, weighted it accordingly, to produce the Tamworth House Price Index … which after all that work, currently stands at for Q4 2017 at 127.82 (Q4 2008 = 100).

I hope you found that of interest and over the coming months and seasons, I shall refer back to Tamworth House Price Index in my Tamworth Property Blog www.tamworthpropertyblog.co.uk to give you a flavour of what is really happening in the Tamworth Property Market.

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

Hall and Thompson Estate Agents Tamworth Youtube Channelhttps://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/

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Generous semi in Dosthill, Tamworth for 165K – Ideal BTL

Today’s BTL deal is a 2 bed semi and  it’s being sold with the added benefit of no upward chain.

Nestled in the highly popular and very desirable Dosthill Village, it speaks volumes as to the location and therefore the potential for long term letting.

This smart looking house  of generous proportion is being sold by Hunters and comes with an asking price of £165,000.

2 bed semi
2 bed semi
kitchen
kitchen
2 bed semi
2 bed semi
school checker
school checker

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

So what do you get for your money – lounge/dining room,  conservatory, kitchen, two double bedrooms, modern bathroom, gardens to front and rear and  2 brick built outhouses.

With an EPC rating of E it’s not ideal but there may be little tweaks that you can do to bring it up to a D rating.

The house is situated approx. 5 minutes walk to the nearest primary school. Although the OFSTED report marks the school as inadequate , it was actually oversubscribed in 2017. I quite often see schools marked as inadequate or in special measures suddenly pull their socks up and dramatically turn the next OFSTED report to show as good.

The house is good to go as far as tenants are concerned and with a rental income of £695pcm this would bring in an investment yield of  5% per annum. Landlords if you are looking to add to your portfolio and this property has caught your eye, give Hunters a call today.

If you would like to follow the Tamworth Property Blog on Facebook then please like this page and follow me on social media! https://www.facebook.com/Hallandthompsonestateagents/

Until next time.

 

Ask Lorraine – I have a new lodger but I’m not a landlord, do I need to carry out any checks?

Ask Lorraine – Dear Lorraine

I own my house in Tamworth and have no mortgage so I am quite fortunate. I’ve recently taken in a lodger, a lovely foreign lady who came complete with a little dog. My lodger moved in 2 months ago and pays her rent weekly and on time, neither the dog or my lodger are any trouble.

Last week I went to my monthly ladies club  and several of us were discussing the pros and cons of me taking in a lodger.  Anyway the latest news in the press concerning government changes and policies to renting was mentioned, I later left the ladies club a little perplexed. I do have a lodger but I’m not a landlord, surely I don’t need to carry out checks do I? I’m not out to make this a business, it was more the company I was aiming for.

Chris

Landlady
Landlady

 

 

 

 

 

 

Lorraine’s answer 

Hello Chris,

From 1 February 2016, all private landlords in England have to make right to rent checks. This means checking that tenants have the right to be in the UK.

What this means for landlords

You need to make right to rent checks if you:

  • Are a private landlord.
  • Have taken a lodger.
  • Are sub-letting a property.
  • Are an agent appointed by a landlord to make right to rent checks.

Some landlords won’t need to make the checks.

Full details can be found on the government website  ….https://www.gov.uk/government/news/right-to-rent-checks-what-they-mean-for-you

I would recommend you reading the guidelines and taking appropriate action as the penalties are very costly.

Until next week

You may wish to check out some of our other links :-

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

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

http://www.hallandthompson.co.uk

https://www.tamworthpropertyblog.co.uk

Tamworth Homeowners Are Only Moving Every 20 Years (part 2)

In the credit crunch of 2008/9 the rate of home moving plunged to its lowest level ever. In 2009 the rate at which a typical house would change hands slumped to only once every 31.5 years. The biggest reason being that confidence was low and many homeowners didn’t want to sell their home as Tamworth property prices plunged after the onset of the financial crisis in 2008. However, since 2009, the rate of home moving has increased (see the table and graph below), meaning today:

The average period of time between home moves in

Tamworth is now 20 years.

This is an increase of 58.94 per cent between the credit crunch fallout year of 2009 and today, but still it is a 38.27 per cent drop in moves by homeowners, compared to 15 years ago (The Noughties).

Average Length of Time (In Years) between Home Moves in the

Tamworth Borough Council Area

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
17.46 15.89 13.75 13.98 12.72 13.14 13.98 12.29 14.58 13.78 16.21
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
12.94 13.24 25.90 31.63 35.02 30.34 30.13 25.87 20.33 21.51 19.90

So why aren’t Tamworth homeowners moving as much as they did in the Noughties?

The causes of the current state of play are numerous. In last weeks article I talked about how ‘real’ incomes and savings had been dropping. Another issue is the long-term failure in the number of properties being built. Only a few weeks ago in the blog, I was discussing the draconian planning rules meaning house builders struggle to locate building land to actually build on.

Back in the 1960’s and 1970’s, as a country, we were building on average 300,000 and 350,000 households a year. The Barker Review a few years ago said that for the UK to stand still and keep up with housing demand (through immigration, people living longer, a just under 50% increase in the number of households with a single person since the 1980’s and family makeup (i.e. divorce makes one household now two)) we needed to build 240,000 households a year. Over the last few years, we have only been building between 135,000 and 150,000 households a year.

Finally, as the UK Population gets older, there is no getting away from the fact that a maturing population is a less mobile one.

So, what does this mean for Tamworth homeowners and landlords? 

Well, if Tamworth people are less inclined to move or find it hard to sell a property or acquire a new one, they are probably less likely to move to an improved job or a more prosperous part of the UK.

Many of the older generation in Tamworth are stuck in property that is simply too big for their needs. The fact is that, in Tamworth, nearly five out of every ten (or 48.6 per cent) owned houses has two or more spare bedrooms; or to be more exact …

10,571 of the 21,733 owned households in the Tamworth

area have two or more spare bedrooms.

So, as their children and grandchildren struggle to move up the housing ladder, with those young families bursting at the seams in homes too small for them i.e. overcrowding, we have a severe case of under-occupation with the older generation – grandparents staying put in their bigger homes, with a profusion of spare bedrooms.

Regrettably, I cannot see how the rate of properties being sold will rise any time soon. Many commentators have suggested the Government should give tax breaks to allow the older generation to downsize, yet in a recent White Paper on housing published just weeks before the General Election, there was no reference of any thoughtful and detailed policies to inspire or support them to do so.

This means that there could be an opportunity for Tamworth buy to let landlords to secure larger properties to rent out, as the demand for them will surely grow over the coming years. As for homeowners; well those in the lower and middle Tamworth market will find it a balanced sellers/buyers market, but will find it slightly more a buyers market in the upper price bands.

Interesting times ahead!

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

Hall and Thompson Estate Agents Tamworth Youtube Channelhttps://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

Ask Lorraine – Should I be given a copy of an EPC for the room I rent

Ask Lorraine – Myself and 4 other males rent a room from our Landlord on a room by room basis. He pays all the bills (they  arrive in his name) and we rent our rooms individually from him. I’m hearing that we should have been given a copy of the EPC when we moved in, is this correct?

Thanks Simon

Energy performance certificate
EPC

Lorraine’s Answer –  Hello Simon,

Legislation refers to an EPC being required  just for “buildings” and mentions giving an EPC to the prospective tenant of a “self-contained letting”  Your dwelling is not self-contained i.e. facilities are shared, as in a HMO (House of Multiple Occupancy)  So according to government guidance your type of dwelling does not require an EPC.

Some landlords do however have EPC’s carried out on HMO’s should they ever need to issue a section 21 notice – regulations state Energy Performance of Buildings is now required in order to serve a valid section 21 notice.

Only a Judge can create a legal precedent on the interpretation of legislation and a Judge is only going to be bound by the wording of the statute. I think this is a grey area and guidelines may well be amended in the future to include “bedsits”. Let’s wait for the first test case to come to court!

My advice for any Landlord  where the house is individual room lets, get an EPC for the whole house, it’s valid for 10 years and at a cost of approx £80.00, it hardly breaks the bank – Belt and Braces approach.

Give a copy to prospective tenants and also to whoever becomes the actual tenant.

Until next week

Interested in reading more of my blogs https://www.tamworthpropertyblog.co.uk

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Tamworth Home Owners Are Only Moving Every 20 Years (Part 1)

As I mentioned in a previous article, the average house price in Tamworth is 6.75 times the average annual Tamworth salary. This is higher than the last peak of 2008, when the ratio was 6.21. A number of City commentators anticipated that in the ambiguity that trailed the Brexit vote, UK (and hence Tamworth) property prices might drop like a stone. The point is – they haven’t.

Now it’s true the market for Tamworth’s swankiest and poshest properties looks a little fragile (although they are selling if they are realistically priced) and overall, Tamworth property price growth has slowed, but the lower to middle Tamworth property market appears to be quite strong.

Scratch under the surface though, and a different long-term picture is emerging away from what is happening to property prices. Tamworth people are moving home less often than they once did. Data from the Office of National Statistics shows that the number of properties sold in 2016 is again much lower than it was in the Noughties. My statistics show…

 

The Total Number of Property Sales Per Annum in the Tamworth

Borough Council Area Since 1995

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
1,236 1,358 1,569 1,543 1,673 1,642 1,543 1,756 1,480 1,566 1,331
                     
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
1,667 1,629 833 682 616 711 716 834 1,061 1,003 1,084

 Even though we are not anywhere near the post credit crunch (2008 and 2009) low levels of property sales, the torpor of the Tamworth housing market following the 2016 Brexit vote has seen the number of property sales in Tamworth and the surrounding local authority area level off to what appears to be the start of a new long term trend (compared the Noughties).

Interestingly, it was the 1980’s that saw the highest levels of people moving home. Nationally, everyone was moving on average every decade. Even though it was during the Labour administration of the late 1970’s where the right to buy one’s council house started, it was the Housing Act of 1980 that that really got council tenants moving. Thatcher’s Tory government financially encouraged council tenants to buy their council-rented homes – for which countless then sold them on for a profit and moved elsewhere. The housing market was awash with money as banks were allowed to offer mortgages as well as the existing building societies, meaning it made it simpler for Brits to borrow even more money on mortgages and to climb up the housing ladder.

But coming back to today, looking at the property sales figures in the Tamworth area since 2010/11, a new trend of number of property sales appears to have started. Interestingly, this has been mirrored nationally. The reasons behind this are complex, but a good place to start is the growth rate of real UK household disposable income, which has fallen from 5.01% a year in 2000 to 1.68% in 2016. Also, things have deteriorated since the country voted to leave the EU as consumer price inflation has risen to 2.7% per annum, meaning inflation has eaten away at the real value of wages (as they have only grown by 1.1% in the same time frame).

With meagre real income growth, it has become more difficult for homeowners to accumulate the savings needed to climb up the housing ladder as the level of saving has also dropped from 4.26% of household income to -1.11% (i.e. people are eating into their savings).

Next week I will be discussing how these (and other issues) has meant the level of Tamworth people moving home has slumped to once every 20 years.

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

Hall and Thompson Estate Agents Tamworth Youtube Channelhttps://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

Tamworth House Prices Outstrip Wage Growth by 15.34% since 2007

I recently read a report by the Yorkshire Building Society that 54% of the country has seen wages (salaries) rise faster than property prices in the last 10 years. The report said that in the Midlands and North, salaries had outperformed property prices since 2007, whilst in other parts of the UK, especially in the South, the opposite has happened and property prices have outperformed salaries quite noticeably.

As regular readers of my blog know, I always like to find out what has actually happened locally in Tamworth. To talk of North and South is not specific enough for me. Therefore, to start, I looked at what has happened to salaries locally since 2007. Looking at the Office of National Statistics (ONS) data for Tamworth Borough Council, some interesting figures came out…

Tamworth West Midlands Nationally
2007  £24,357  £22,417  £23,920
2008  £25,059  £23,390  £24,960
2009  £24,216  £23,754  £25,506
2010  £25,246  £24,398  £26,088
2011  £25,761  £24,190  £26,010
2012  £25,002  £24,404  £26,432
2013  £25,121  £25,116  £26,931
2014  £23,769  £25,022  £27,097
2015  £24,903  £25,589  £27,508
2016  £25,527  £26,406  £28,132

Salaries in Tamworth have risen by 4.8% since 2007 (although it’s been a bit of a rollercoaster ride to get there!) – interesting when you compare that with what has happened to salaries regionally (an increase of 17.79%) and nationally, an increase of 17.61%.

Next, I needed to find what had happened to property prices locally over the same time frame of 2007 and today. Net property values in Tamworth are 20.14% higher than they were in late 2007 (not forgetting they did dip in 2008 and 2009). Therefore…

Property values in the Tamworth area have increased at a higher rate than wages to the tune of 15.34% … meaning, Tamworth is bucking the regional trend

All this is important, as the relationship between salaries and property values is the basis on how affordable property is to first (and second, third etc.) time buyers. It is also vitally relevant for Tamworth landlords as they need to be aware of this when making their buy-to-let plans for the future. If more Tamworth people are buying, then demand for Tamworth rental properties will drop (and vice versa).

As I have discussed in a few articles in my blog recently, this issue of ‘property-affordability’ is a great bellwether to the future direction of the Tamworth property market. Now of course, it isn’t as simple as comparing salaries and property prices, as that measurement disregards issues such as low mortgage rates and the diminishing proportion of disposable income that is spent on mortgage repayments.

On the face of it, the change between 2007 and 2017 in terms of the ‘property-affordability’ hasn’t been that great. However, look back another 10 years to 1997, and that tells a completely different story. Nationally, the affordability of property more than halved between 1997 and today. In 1997, house prices were on average 3.5 times workers’ annual wages, whereas in 2016 workers could typically expect to spend around 7.7 times annual wages on purchasing a home.

The issue of a lack of homeownership has its roots in the 1980’s and 1990’s. It’s quite hard as a tenant to pay your rent and save money for a deposit simultaneously, meaning for many Tamworth people, home ownership isn’t a realistic goal. Earlier in the year, the Tories released proposals to combat the country’s ‘broken’ housing market, setting out plans to make renting more affordable, while increasing the security of rental deals and threatening to bring tougher legal action to cases involving bad landlords.

This is all great news for Tamworth tenants and decent law-abiding Tamworth landlords (and indirectly owner occupier homeowners). Whatever has happened to salaries or property prices in Tamworth in the last 10 (or 20) years … the demand for decent high-quality rental property keeps growing. If you want a chat about where the Tamworth property market is going – please read my other blog posts on www.tamworthpropertyblog.co.uk or drop me note via email, like many Tamworth landlords are doing.

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