Value of Tamworth Property Market falls £82.8m

The combined value of Tamworth’s housing market has fallen by £82,781,160 in the last 6 months, meaning the average value of a Tamworth property has decreased in value by an average of £3,162.

This is great news for Tamworth first time buyers and Tamworth buy to let landlords, as there is a slight hesitation in the market because of the uncertainty over Brexit. As I have always said, investing in Tamworth property, be it for you to live in or as a buy to let investment, is a long-term game. In the grand scheme of things, this minor change over the last 5 or 10 years is nothing.

The RICS’s latest survey of its Chartered Surveyor members showed that nationally the number of properties actually selling has dropped for the 16th month in a row. Locally in Tamworth, certain sectors of the market are matching that trend, yet others aren’t. It really depends which price band and type of property you are looking for, as to whether it’s a buyers or sellers market.

The RICS also said its member’s lettings data showed a lower number of rental properties coming on to the market. Anecdotal evidence suggests that (and this is born out in the recent English Housing Survey figures) Tamworth tenants over the last few years are stopping in their rental properties longer, meaning less are coming onto the market for rent. I have noticed locally, that where the landlord has gone the extra mile in terms of decoration and standard of finish, this has certainly helped push rents up (although those properties where the landlord has been remiss with improvements and standard of finish are in fact seeing rents drop). Tamworth tenants are getting pickier – but will pay top dollar for quality. So much so, I believe there will be a cumulative rise of around fourteen to sixteen per cent over the course of the next five years in private rents for the best properties on the market.

Back to the Tamworth Property Values though …

This drop in Tamworth property values doesn’t particularly concern me. The fact is that over the last 6 months 390 properties have sold for a combined value of £83,199,870. You see, that drop must be seen in perspective in that 6 months ago, the total value of Tamworth property stood at £5,701,349,500 (£5.70bn), and today it stands at £5,618,568,340 (£5.62bn) .. this change is a drop in the ocean.

In the short term, say over the next six months and assuming nothing silly happens in Korea, the Middle East or Brexit negotiations, it will be more of the same until the end of the year. In the meantime, the on-going challenges ensuring we as a Country build more homes (although the Office of National Statistics figures released in July showed nationally the number of new homes started to be built over the second Quarter of 2018 had dropped dramatically) makes me think that Tamworth (and Nationally) property value is likely to recommence an upward trajectory as we go into 2019.

One final thought for all the buy to let landlords in Tamworth (and indirectly this does affect all you Tamworth homeowners too). I do hope the recent tax changes towards buy to let landlords don’t bite as deep as it is possibly starting to with certain landlords I know.  We talked about this in an article a few weeks ago and I know why the Government wanted to change the balance by taxing landlords and providing a lift for first time buyers .. however, this may well come at the expense of higher rents for those Tamworth tenants that don’t become first time buyers, as the appeal of buy to let potentially weakens.

If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on Lorraine@hallandthompson.co.uk

Don’t forget to visit the links below to view back dated deals and Tamworth Property News.

Blog  – https://www.Tamworthpropertyblog.co.uk

Facebook – – https://www.facebook.com/hallandthompsonestateagents

Twitter – https://twitter.com/hallandthompson

Website  –  https://www.hallandthompson.co.uk

‘Taxing’ Time for the 1,883 Tamworth Buy To Let Landlords

Over the last twenty years, there has been a shift in the way the Tamworth (and the UK’s) property market works. In the 1960’s, 70’s, 80’s and 90’s, a large majority of twenty somethings saved up their 5% deposit, went without life’s luxuries of going out and holidays etc., for a couple of years and then bought their first home with their hard earned savings.

By 2000, 57.6% of Tamworth 25 to 29 years owned their own home (compared to 46% Nationally (and 80.5% of Tamworth 30 to 34 year olds in 2000 owned their own home – again compared to 64.2% nationally) whilst the remaining youngsters mostly rented from the Council and in some rare cases, privately rented.

Now it’s 2018, and those levels of homeownership have slipped dramatically and now only 30.7% of Tamworth 25 to 29 year olds own their own home and 54.2% of Tamworth 30 to 34 year olds own their own home (interestingly mirroring the National picture of 24.5% for the younger age cohort and 64.2% for the older 30 to 34 year cohort).

There was concern in Government since the late Noughties that this shift from homeownership to private renting wasn’t good for the well-being of the Country and things needed to change, to make it a more level playing field for first time buyers. House prices needed to be more realistic and there needed to be a carrot and stick for both landlords and first time buyers.

In the 1980’s and 1990’s, interest rates were the weapon of choice of Government to cool or heat up the UK housing market – and it did work – up to a point. It’s just interest rates also affected so many other sectors of the UK economy (and not always a in good way). The policy of interest rates to control the economy is called ‘Monetary Policy’. Monetary policy is primarily concerned with the management of interest rates (and the supply of money) and is carried out by the Bank of England (under direction from the Government).

It’s just in this post Credit Crunch, Brexit environment, the use of higher interest rates wouldn’t directly affect landlords (as around two thirds of buy to let properties are bought without a mortgage). Therefore, an increase in interest rates would have hardly any effect on landlords and hit the first time buyers – the people the Government would be trying to help!

Also, given muted growth of real income (i.e. real income being the growth salaries after inflation) in the past few years, an uplift in interest rates (from their ultra-low 0.5% current levels) would have a massive effect on Brit’s household disposable income. Yet, over 90% of new mortgages in 2018 being taken are fixed rate and with such low rates, it has made buying a property comparatively attractive.

Instead, over the last 8 years, the Government has encouraged first time buyers and clipped the wings of landlords with another type of economic policy – Fiscal Policy (Fiscal Policy is the collective term for the taxing (and spending) actions of the Government).  First time buyers have had the Help to Buy Scheme, Stamp Duty Exemption and contributions to their deposit by HMRC. On the other side the coin, landlords have had the way they are able to offset the tax relief of their mortgage payments against income change (for the worse), an increase in Stamp Duty (for the worse) and they will be hit with additional costs as the Government will be phasing out fees to tenants in the next 12 to 18 months.

So, what does this all mean for the 1,883 Tamworth landlords?

The days of making money in Tamworth buy to let with your eyes closed are long gone. There are going to be testing times for Tamworth landlords, yet there is still a defined opportunity for those Tamworth landlords who are willing to do their homework and take guidance from specialists and experts.

It’s all about looking at your Tamworth portfolio (or getting a property professional to do so) and ascertaining if your current portfolio, mortgage and gearing are designed to hit what you want from the investment (because that is what it is – an investment) in terms of income now and income in the future, capital growth and when you plan to dispose of your assets.

I have seen many Tamworth landlords (both who use me and my competitors) to manage their rental property or find them tenants – and on many occasions recently, I have told them to SELL – yes sell some of their portfolio to either reduce mortgage debt or buy other types of property that match what they want in the short and long-term from their investments. I know that sounds strange – but my role isn’t just to collect the rent  .. it’s also to give strategic advice and opinion on the landlord’s portfolio to help them meet their current and future investment goals.

The opportunities will appear in the Tamworth property market for Tamworth landlords from gentler growth in property values linked with a restrained Tamworth property market, meaning if you put in the time, there will be deals and great bargains to have. Many landlords in Tamworth (both clients and non-clients) send me Rightmove links each week, asking my opinion on the suitability of the investment. Some are exceptional – whilst others are duds. The bottom line is, private renting will continue to outgrow first time buyers in the next 5 to 10 years and as we aren’t building enough homes in the UK, which means rents can only go in one direction – upwards!

If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on Lorraine@hallandthompson.co.uk

Don’t forget to visit the links below to view back dated deals and Tamworth Property News.

Blog  – https://www.Tamworthpropertyblog.co.uk

Facebook – – https://www.facebook.com/hallandthompsonestateagents

Twitter – https://twitter.com/hallandthompson

Website  –  https://www.hallandthompson.co.uk