Tamworth Property Market – Summer 2018 Update

I was recently reading a report by Rightmove that a North South Divide has started to appear in the UK property market – so I wanted to see if Tamworth was falling in line with those thoughts.  In the North, there are 7.12% less properties on the market than 12 months ago, whilst in contrast, in the South, there are 14.7% more properties on the market than 12 months ago.

With the decline in the number of properties for sale in the North compared to 12 months ago, that means the North is more of a sellers’ market.  However, on the other side of the coin, there is a significant rise in buyer choice in all of the Southern regions, showing there are signs of a buyers’ market, which in some markets is a driving force for a buyers’ market and some downwards price pressure.

So, looking closer to home at asking prices and the number of homes on the market. In the West Midlands region, according to Rightmove, the average asking prices of new to the market properties are 5.5% higher than 12 months ago and 0.4% higher over the last month.  Now I must stress, this is asking prices – not what is happening to actual property values.  Also, regionally, there are 2.2% less properties on the market than 12 months ago.

Even closer to home, overall, the number of properties and building plots for sale in Tamworth has increased by 37%, going from 362 properties for sale a year ago to 496 properties for sale as I write this article, meaning Tamworth does not in fact match the regional trend.

Looking at the individual types of Tamworth property, you can quite clearly see the different markets within Tamworth.  The two sets of figures that stand out are the increase in Terraced/town houses for sale, rising 68% and the increase in Apartments by just 16%.

 

(NB There are a handful more Building plots and other types of property that can’t be placed into the four category’s … and it’s those that make up the total numbers in the paragraph above the table)

Although these figures don’t tell the whole story because in certain areas of Tamworth, certain types of properties (particular locations and Primary school catchment areas) are in short supply.  This has caused some frustration with buyers of those types of properties with this lack of supply, which in turn has sparked some very localised asking price growth within those hot spot areas, although sometimes to levels where sellers optimism turns into silly over the top asking prices.

This means the property sticks, which isn’t sustainable, therefore as a consequence, there are certain parts of the Tamworth housing market with upward asking price movements being offset in part by intermittent asking price reductions where home owners or their estate agents have been over optimistic with their initial marketing asking price.

What does this mean for homeowners and landlords in Tamworth?

If you are planning to sell your home or buy to let investment, the key for determined sellers is to set your asking price correctly from the start.  It’s so vital to be competitive to attract buyers.  Everyone has access to three main property portals (Rightmove, On the Market and Zoopla) so can easily compare your property against similar ones.  When you do search these portals, make sure you ask the website to show properties that are sold subject to contract as well to check what properties are selling for in your neighbourhood. Unless you have something highly unusual or unique, this perhaps isn’t the best market to set an optimistic asking price in hoping to find someone who would pay that silly price.

And if you are buying in Tamworth?  The numbers of buyers are lower than a few years ago, although those buyers that are in the market have become quite serious.  The times of time wasting “carpet treaders” (estate agency slang for the same type of people car dealers call tyre kickers) are long gone.  Those buyers that are in the market are real buyers, wanting to buy, but only at the right price.  We live in a 21st century society that is “time-poor” so nobody is wanting to even view a house, let alone pay over the odds if they believe the asking price is too high.  So, if you are buying, do your homework, ask plenty of questions of the agent, find out the motivation of the sellers and the real reasons behind why they are moving … and you might just bag a good deal?

If you are interested in the Tamworth Property Market and haven’t signed up to the Tamworth Property Blog you are missing out on critical/ important information that all landlords should consider when renting out their property.  Visit the Tamworth Property Blog at www.tamworthpropertyblog.co.uk

 

 

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

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‘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

What Will Happen to Tamworth Property Values Now Interest Rates Have Risen?

welcome to Tamworth
welcome to Tamworth

The current average value of a property in Tamworth currently stands at £214,600 and the base rates at 0.5%. In many of my articles, I talk about what is happening to property values over the short term (i.e. the last 12 months or the last 5 years), but to answer this question we need to go back over 40 years, to 1975.

The average value of a Tamworth property in 1975 was £10,389

However, since 1975, we have experienced in the UK, inflation of 807.5%.

Back in 1975, the average salary was £2,291 and average car was £1,840. A loaf of bread was 16p, milk was 28p a pint and a 2lb bag of sugar was 30p. Inflation has increased prices, so comparing like for like, we need to change these prices into today’s money. In real spending power terms, an average value of a Tamworth house in 1975, expressed in terms of today’s prices is £94,294.

That means in real terms, property costs a lot more today, than in the mid 1970’s, but has it always been that way? Looking at the important dates of the UK property market, you can see from this table, the last two property boom years of 1989 and 2007, show that there was a significant uplift in the cost/value of property (when calculated in today’s prices).

Tamworth House Prices Adjusted for Retail Prices.
1975 1979 1982 1989 1997 2007 2009 Today
£87,229 £102,347 £85,512 £151,946 £95,479 £249,379 £203,263 £214,600
Office for National Statistics Retail Price Index was applied to convert nominal property values to current values

Before we move on, hold onto the thought that you can quite clearly see from the table, in real terms, properties are cheaper today in Tamworth than they were in 2007!

So, it made me wonder if there was a link between house prices, inflation and other external economic factors, such as interest rates? Interest rates have a strong influence on inflation and property values, principally because changes in the interest rate affect the cost of mortgage payments for homeowners and they affect the flow of foreign currency in (or out) of an economy, thus changing the exchange rate and prices we can sell our goods and services abroad and prices we pay on imports.

So how exactly do interest rates affect property values?

When interest rates rise, it has a substantial effect on increasing the monthly cost of mortgages. Higher mortgage payments will discourage prospective homebuyers or people looking to move up market (meaning their mortgage payments go up) – thus making it comparatively cheaper to rent.

Furthermore, the high cost of mortgage payments sometimes also pushes some existing home owners to sell, meaning there is an increase in house sellers and a decline in house purchasers, and as the law of economics state, when supply is increased and demand falls, (house) prices fall.

Another fallout of a rise in mortgage payments is a rise in repossessions. Interestingly, repossessions in the UK rose from 15,000 per annum in the late 1980’s to over 75,000 per annum in the early 1990’s, meaning even more properties came onto the market, exasperating the issue of over supply – pushing property values even lower.

 

High interest rates caused property values to fall in mid 1970’s, early 1980’s and most recently, the early 1990’s (who can remember the 15% mortgage rate!) Conversely though, the drop in property values in 2008/2009 – was not due to interest rates, but due to the credit crunch and global recession.

So, what will happen now interest rates have risen?

It is vital to remember that interest rates are not the only factor affecting property values. It is also possible that when interest rates increase (which they will from the current 0.5%), property values can also continue to rise (it happened throughout the mid to late 1980’s and again between the boom years of 2002 and 2007). When confidence in the economy is good, and we as a Country experience a period of rising real incomes (i.e. after inflation), then the British in the past have continued to buy bricks and mortar, notwithstanding the rise in interest rates.

Another important factor on property values is the supply of housing. A big reason in the current level of Tamworth house prices is due to the shortage of supply, which has kept property values higher than I would have expected.

An additional factor is whether homeowners have a variable or fixed rate mortgage. 90.6% of new mortgages taken in the last Quarter were at a fixed rate, and 66.2% of all mortgaged homeowners are on fixed-rate mortgages, therefore, they will not notice the effects of higher interest rate payments until they re-mortgage in a few year’s time, meaning there is frequently a time-lag between higher interest rates and the effect on property values.

Another factor on mortgages is the ability to get one in the first place. Back in 2014, mortgage providers were told to be stricter on their lending criteria when arranging mortgages following the footloose days of 125% loan to value mortgages with the Northern Rock.  These new rules are a lot more rigorous on borrowers’ ability to repay the payments (although it makes me laugh, when with starter homes it nearer is always cheaper to buy then rent!).

I think the final point is this … affordability is the key. Look at the graph (the red bars) and you will see in REAL HOUSE PRICE terms – it’s cheaper to buy a home today than it was in 2007, yet why aren’t we seeing people buying property at the levels we were seeing in the 2000’s before the credit crunch? Again, looking at the reasons why, I will talk about in future articles.

In conclusion, interest rates are important – but nowhere near as important on the Tamworth (and British) property market than they were 15 or 20 years ago.

So, before I go, one final thought – how do we measure the success of the Tamworth property market? Well I believe one measure that is a good bellwether is the number of property transactions, as that could show a more truthful picture of the health of the property market than property values. Maybe I should talk about that in an up and coming article?

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

Ask Lorraine – I need to trace a Tamworth Guarantor

Ask Lorraine – My Tamworth tenants moved out after leaving rent arrears of nearly three thousand pounds and I have decided to persue the tenant’s guarantor for the money.

Up to the point of the tenants doing a moonlight flit I had been in contact with the guarantor through Facebook. I had made him aware of the arrears situation and his obligations as guarantor.

Tracing a guarantor
Tracing a guarantor

The moment I found out that my tenants had vanished, I also found out that the guarantor had not only deleted his Facebook account but his mobile number had changed as well.

Would you credit it? The address given by him at the start of the tenancy is incorrect, they’ve never even heard of him there!

I would like to trace this gentleman, I think possibly that he is still living and working in the Tamworth area.

Can you  offer any advice?

Cheers Naz

Lorraine’s Answer – 

Hi, You do not say what steps you had taken with the tenants to recover the unpaid rent or if you had served a section 8 or section 21 on them.  Did you conduct checks on the tenants or the guarantor ? from you email,  it appears that you did not, on the guarantor.

Try Nationwide Tracing Services Limited to find your guarantor or missing tenants, their fee is £35 which is paid only when they have traced the named person/s.

Should you wish to continue to self manage the tenancy,  I would recommend joining an association – The National Landlords Association, they offer great advice.

I hope you have success in your search.

Until next week.

https://www.hallandthompson.co.uk

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Has my Tamworth lodger become my accidential tenant?

My best friend came to visit me nearly three years ago, she stayed on and rented one of my rooms.  With low rent and fully inclusive of all bills, she had a great deal.

After 6 months I went to live with my partner so rented out another room in my house. Shortly after I moved out  my best friends son came to stay and has been there ever since.

When I was  advised recently I had created a HMO, I told my friend that her son had to leave the property, she advised that she would be vacating when he did. I then gave them a polite written notice that I wanted them both the leave.

When the second tenant left  6 weeks ago I locked her room to prevent it being used.

My question is – As nothing was ever put down on paper, Is my friend to be treated as a tenant?

What happens if she decides not to move out voluntarily? And how do I handle her son?

Many thanks

 

game over
game over

 

 

 

 

 

 

 

As they can only be a lodger while you live in the property it looks like you have created a tenancy.

Keep things as pleasant as possible and hope that things do not break down between all parties.  If your friend and her son do decide not to move out, I would recommend that you seek professional advice as soon as possible.

I hope all goes well.

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£174,101 – The Typical Profit Each Tamworth Landlord Could Make in The Next 25 Years

I am of the opinion that buy to let investment in Tamworth, in the long-term, will bring substantial returns for landlords, irrespective of latest regulation and tax changes.

Taking a very conservative (with a small ‘c’) view, I believe landlords will see a projected net profit of £295,588 per property over the next 25 years through capital gains and rental. When inflation is taken into account that works out at £174,101 (in today’s money) or around £6,964 per year. The breakdown applies to a basic tax-paying landlord placing a characteristic 25% deposit on a £151,000 terraced/town house property.

Capital gains make up a substantial part of a landlord’s returns. Again, being conservative, I have assumed that Tamworth house prices over the next quarter century (between 2018 and 2043) will rise at half the rate they did between 1993 and 2018 (the preceding 25 years), therefore the example Tamworth property in the previous paragraph would grow in value to £342,921, providing gross capital gains of £191,921.

A typical Tamworth landlord receives, on average, rent of £7,980 per annum per terraced/town house property and so, over a 25-year period, that example property would generate a total rental income of £305,036 (again – very conservatively assuming a compound annual growth rate in the rent of 1.71% per annum).

Nevertheless, there are costs to running a buy to let property (mortgages, void periods, repairs, agents fees etc) .. and over those same 25 years, I have estimated that to be £201,369  .. giving the net profit levels mentioned in the second paragraph.

Now of course I have had to make assumptions to reach these figures, yet I hope you would agree, I have been very unadventurous with my assumptions.

The Tamworth (and UK as a whole) buy to let property market is experiencing a massive sea of change. Regulation and tax changes have altered the dynamic in the property market, diminishing its appeal to inexperienced and amateur landlords, and these new tax changes mean higher tax bills for higher rate tax landlords. Yet, despite these rising costs, there are still healthy returns to be found in Tamworth buy to let investment for knowledgeable and steadfast landlords. Nonetheless, the days of anything making money and idle speculation are long gone.

Buy to let is a long-term business undertaking, necessitating commitment and expertise. Don’t put your head in the sand and think it doesn’t affect you. Tamworth buy to let landlords must be equipped to start business and tax planning, take portfolio management advice to ensure their investments will meet their investment goals, appreciate the risks as well as the rewards, and, most crucially, the obligations they have towards their tenants.

If you are a Tamworth landlord, irrespective of whether you are a client of mine or another agent in Tamworth (or even you do it yourself), feel free to drop me a line or pop into the office for an informal chat on the future direction of the Tamworth rental market and where opportunities may lie.

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

 

As Lorraine – My Tamworth tenants are getting married, will this change the tenancy?

Make out the tenancy agreement with the current names. Once the couple are married make a note of the change and when writing, use the new name. 

A new tenancy agreemnt will not be required after the name change as it is still the same person.

Additional 1,414 Tamworth Rented Homes Required by 2027

I have been doing some research, looking both at National and Regional reports on the demand and supply of property and people together with future projections on the economy, population and family demographics with some interesting results.  According to the Office of National Statistics, in the last financial year nationally, private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social (aka council and housing association) stock increased by 12,000 dwellings.

It was the private rental figures that caught my eye.  With eight or nine years of recovery since the Credit Crunch, economic recovery and continuing low interest rates have done little to setback the mounting need for rented housing.  In fact, with house price inflation pushing upwards much quicker than wage growth, this has meant to make owning one’s home even more out of reach for many Millennials, all at a time when the number of council/social housing has shrunk by just over 2.5% since 2003, making more households move into private renting.

There are 7,711 people living in 3,300 privately rented

properties in Tamworth.

In the next nine years, looking at the future population growth statistics for the Tamworth area and making careful and moderate calculations of what proportion of those extra people due to live in Tamworth will rent as opposed to buy, in the next ten years, 3,305 people (adults and children combined) will require a private rented property to live in.

Therefore, the number of Private Rented homes in Tamworth will need to rise by 1,414 households over the next nine years,

That’s 157 additional Tamworth properties per year that will need to be bought by Tamworth landlords, for the next nine years to meet that demand.

… and remember, I am being conservative (with a small ‘c’) with those calculations, as demand for privately rented homes in Tamworth could still rise more abruptly than I have predicted as I would ask if Theresa May’s policies of building 400,000 affordable homes (which would syphon in this 5-year Parliamentary term is rather optimistic, if not fanciful?

So, one has to ask wonder if it was wise to introduce a buy to let stamp duty surcharge of 3% and the constraint on mortgage tax relief could curtail and hold back the ability of private landlords to expand their portfolios?

Well a lot of landlords are taking on these new hurdles to buy to let and working smarter.  Buying the property at the right price and using an agent to negotiate on your behalf (we do this all the time) … and the 3% stamp duty level isn’t an issue.  Incorporating your property portfolio into a Limited Company is also a way to circumnavigate the issues of mortgage tax relief (although there are other hurdles that need to be navigated on that tack), but just look at the growth of proportion of Buy to Let properties in the Country since the Summer of 2016 … something tells me smart Landlords are seeing these challenges as just that … challenges which can be overcome by working smarter.

I have a steady stream of Tamworth landlords every week asking me my opinion on the future of the Tamworth property market and their individual future strategy and, whether you are a landlord of mine or not, if you ever want to send me an email or pop into my office to chat on how you could navigate these new Buy to Let waters … it will be good to speak to you (because you wouldn’t want other landlords to have an advantage over you – would you?)

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http://hall-and-thompson-estate-agents-ltd-ltd.page.lettinglead.com/combined-valuation

Additional 1,414 Tamworth Rented Homes Required by 2027

I have been doing some research, looking both at National and Regional reports on the demand and supply of property and people together with future projections on the economy, population and family demographics with some interesting results.  According to the Office of National Statistics, in the last financial year nationally, private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social (aka council and housing association) stock increased by 12,000 dwellings.

It was the private rental figures that caught my eye.  With eight or nine years of recovery since the Credit Crunch, economic recovery and continuing low interest rates have done little to setback the mounting need for rented housing.  In fact, with house price inflation pushing upwards much quicker than wage growth, this has meant to make owning one’s home even more out of reach for many Millennials, all at a time when the number of council/social housing has shrunk by just over 2.5% since 2003, making more households move into private renting.

There are 7,711 people living in 3,300 privately rented

properties in Tamworth.

In the next nine years, looking at the future population growth statistics for the Tamworth area and making careful and moderate calculations of what proportion of those extra people due to live in Tamworth will rent as opposed to buy, in the next ten years, 3,305 people (adults and children combined) will require a private rented property to live in.

Therefore, the number of Private Rented homes in Tamworth will need to rise by 1,414 households over the next nine years,

That’s 157 additional Tamworth properties per year that will need to be bought by Tamworth landlords, for the next nine years to meet that demand.

… and remember, I am being conservative (with a small ‘c’) with those calculations, as demand for privately rented homes in Tamworth could still rise more abruptly than I have predicted as I would ask if Theresa May’s policies of building 400,000 affordable homes (which would syphon in this 5-year Parliamentary term is rather optimistic, if not fanciful?

% of properties bought as BTL since 2016
% of properties bought as BTL since 2016

So, one has to ask wonder if it was wise to introduce a buy to let stamp duty surcharge of 3% and the constraint on mortgage tax relief could curtail and hold back the ability of private landlords to expand their portfolios?

Well a lot of landlords are taking on these new hurdles to buy to let and working smarter.  Buying the property at the right price and using an agent to negotiate on your behalf (we do this all the time) … and the 3% stamp duty level isn’t an issue.  Incorporating your property portfolio into a Limited Company is also a way to circumnavigate the issues of mortgage tax relief (although there are other hurdles that need to be navigated on that tack), but just look at the growth of proportion of Buy to Let properties in the Country since the Summer of 2016 … something tells me smart Landlords are seeing these challenges as just that … challenges which can be overcome by working smarter.

I have a steady stream of Tamworth landlords every week asking me my opinion on the future of the Tamworth property market and their individual future strategy and, whether you are a landlord of mine or not, if you ever want to send me an email or pop into my office to chat on how you could navigate these new Buy to Let waters … it will be good to speak to you (because you wouldn’t want other landlords to have an advantage over you – would you?).

Until next time, happy house hunting.

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