Tamworth Rents To Rise Quicker Than Tamworth Property Prices In Next 5 Years

The next five years will see an interesting change in the Tamworth property market. My recent research has concluded that the rent private tenants pay in Tamworth will rise faster than Tamworth property prices over the next five years, creating further issues to Tamworth’s growing multitude of renters. In fact, my examination of statistics forecasts that ..

Tamworth property values and rents

By 2022, Tamworth rents will increase by 23%, whereas Tamworth property values will only grow by 16%.

Let me explain why I have come to those conclusions:

Over the last five years, property values in Tamworth have risen by 25.9%, whilst rents have only risen by 17.1%.

Tamworth property values

Tamworth property values

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up whilst the Press predicted some landlords expect to reduce their portfolios in the next couple of years, meaning Tamworth tenants will have fewer properties to choose from, which will push rents higher. In fact, talking to fellow property professionals in Tamworth, there appears to be privation and shortage of new rental properties coming on to the Tamworth lettings market.

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Tory’s have changed the taxation rules for landlords in the way buy to let properties are to be taxed. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

All I would say to Theresa May and Philip Hammond is that they must be wary about indicating both red and green lights at the same time to the private rented sector. They can’t expect the armies of small private landlords to continue to house around a fifth of the population and then tax the hell out of them. They didn’t invest in buy to let as a charity or to satisfy any philanthropic urges. Something has to give – and that will be significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords … if it wasn’t for landlords buying all these buy to let properties over the last 15 years, I am not sure where everyone would be living today – because most the Council houses were sold off in the 1980’s!).

With the challenges ahead, with the ‘B’ word (that’s budget if you wondered!), house price inflation will be tempered over the coming five years in Tamworth. As I have discussed in previous articles, the number of properties on the market in Tamworth remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers… and hence why I believe property values in Tamworth will only be 16% higher in five years’ time.

Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Tamworth people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands (because they have no money), with the average rent for a Tamworth rental property currently standing at £762 per month …

Over the next five years, I predict the average rent

in Tamworth will rise to £937 per month

These are interesting times. There is still money to be made in buy to let in Tamworth – Tamworth landlords will just need to be smarter and more savvy with their investments. If you are looking for such advice and opinion to help you meet those investment goals, one place you can find more information is the Tamworth Property Blog https://www.tamworthpropertyblog.co.uk

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

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Tamworth’s housing affordability hits a ratio of 6.75 to 1

A Tamworth homeowner emailed me last week, following my article posted in the Tamworth Property Blog about the change in attitude to renting by the youngsters of Tamworth and how they thought it was too expensive for first time buyers to buy in Tamworth.  There can be no doubt that buy to let landlords have played their part in driving up property values in Tamworth (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Tamworth.

In the email, they said they thought the plight of the first-time buyers in Tamworth was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Tamworth going against all the buy to let landlords.

They went on and asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Tamworth is?  The best measure of the affordability of housing is the ratio of Tamworth Property Prices to Tamworth Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Tamworth property was 6.27 times higher than the average annual wage in Tamworth).

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 (EST)
3.19 3.62 4.62 5.87 6.71 6.21 6.21 6.02 6.27 6.75
Ratio of Tamworth property prices to Tamworth average wages
Ratio of Tamworth property prices to Tamworth average wages

 

 

 

 

 

 

This deterioration in affordability of property in Tamworth over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.

… but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 2 bed terraced in Tamworth for around £130,000 and only need to find £6,500 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  Either save up for a couple of years to save the deposit and go without two annual foreign holidays, the full Satellite or Cable TV package with Sports and Movies costing three figures a month, the latest mobile phone and out socialising … or not as the case maybe?

I think we as a Country have changed … renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation … because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

History of tenure in UK - 1918 to today.
History of tenure in UK – 1918 to today.

 

 

 

 

 

 

 

 

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Tamworth), one source of information is the Tamworth Property Blog  www.tamworthpropertyblog.co.uk

Why not join me at the Moathouse, Tamworth for a cuppa and a cosy chat, on the Tamworth property market?

lorraine@hallandthompson.co.uk   or 077531484956

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Coton Green, Tamworth BTL – Yield 5.27%

I’ve just noticed this,  three bedroom semi terraced house on the very popular Coton Green area of Tamworth. The property is a very nice spec and good to go, that’s right, drive it straight off the forecourt.  Two good size bedrooms and a smaller room ideal as a study/cot room.  A modern kitchen, guest cloakroom, extended garage and generous rear garden.

Interested? then call our good friends Taylor Cole and book yourself a viewing  01827 796861

 

 

 

http://www.rightmove.co.uk/property-for-sale/property-59013526.html

So the burning question, what yield can I expect? well if you pay the asking price of 165K and rent for £725pcm you can achieve a yield of 5.27%

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

*** 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

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‘Flipping’ Heck – Tamworth Property Values Rise by £24.77 a day


Investing in Tamworth buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Tamworth’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Tamworth, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Tamworth property has risen by £45,200 (equivalent to £24.77 a day), taking it to a current average value of £201,700. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

Why not try to flip

Flipping Property

This demonstrates how the Tamworth property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Tamworth landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Tamworth people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Tamworth, then one place for such information would be the Tamworth Property Blog. http://www.tamworthpropertyblog.couk

Would you like some impartial advice on your next BTL or are you looking to break into the BLT market, why not give me a call 01827 425195  or email me lorraine@hallandthompson.co.uk

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

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BTL yield 5.57% Cracking Bungalow, Tamworth B79

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

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

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

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Buy to let investment – Freville Close, Tamworth – Gross Yield 6.21%

One of my clients happened to be in the hairdressers the other day and we got talking about the Tamworth property market. She wanted to know about the implications of the Stamp Duty hikes and new taxation rules coming in to force in April. Was it all doom and gloom for private landlords.

Well despite these changes coming into force, landlords are still investing in buy to let, so I spent a good 10 minutes trawling through the portals and spotted this cracking 3 bedroom semi  that would make an ideal long term rental investment.

Located on Freville Close  which is  just a short walk to the town centre, train station and local shops.

In good overall condition and coming in with 710.01 sq ft of space, a slight freshen up and the property is ready to be rented.

The rent on this property is going to be £725 pcm and based on the asking price, if you pay £140,000  that will give you a gross yield of 6.21% .

On the market with local agents Bairstow Eves .

http://www.rightmove.co.uk/property-for-sale/property-64739660.html

B79 Tamworth
Freville Close

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

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Tamworth’s private renting set to hit 4,653 households by 2021 – Is Buy to Let immoral? (Part 1)

Can we blame the 55 to 70-year-old Tamworth citizens for the current housing crisis in the town?

Also known as the ‘Baby Boomer Generation’, these Tamworth people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

…Yet some have suggested these Tamworth baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%,

but average Tamworth house prices rose by 111.46%

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents … it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

Like all things in life, we must look to the past, to appreciate where we are now.

The three biggest influencing factors on the Tamworth (and UK) property market in the later half of the 20th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory’s to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Tamworth.

To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays … no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you … I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!

So, in Part Two next week, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).

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.

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Are The Mobile Homes In Amington A Good Investment? Amington, Tamworth.

More and more recently I’ve been spotting mobile houses pop up for sale on Amington Park, Tamworth. When I mention them to landlords, family and friends many people have a pre-conceived idea of what a mobile home is and these unfortunate homes are often stigmatised as being a little bit cheap and trashy. After reading this, hopefully you’ll be able to change your mind if you’re in that camp!

A modern mobile home is an ideal, low cost, low maintenance home, usually for the elderly (which we’re always hearing Britain has a growing number of!) a fantastic summer Holiday home to either rent or use yourself if you’re not from the area, so when they come up for sale in Tamworth I get rather excited thinking about the potential they come with!

Searching around the internet, you can find these low cost homes for as little as £67,500 for a two bed property, with a lovely garden and plenty of space to breathe in and going by the current cost of an average two bedroom mid terrace in the area costing almost £30,000 more, you’re in for a big saving.

But the important question is… Is there a market for this type of property?

In short, yes and no. They do make great holiday homes – Tamworth and the surrounding areas have some fantastic summer attractions, such as Twycross Zoo, Drayton Manor and a generous handful of historic sites such as Tamworth Castle and Lichfield Cathedral, that would make this property more than attractive as a holiday let in the summer to Autumn months but that would leave you with an empty property for half a year, however holiday homes do come with a premium on their rent!

But what about if you wanted to rent to a tenant?

There is a market for low cost, affordable homes in the area and as I’ve discussed – this property I’ve featured would make an exceptionally good let to not only the more mature person  but to those who may be in a lower income threshold. These houses are far cheaper to rent than a bungalow and do not offer the mobility issues that a house may present. If you rented this particular property at just £350 per month, you would still stand to gain a healthy return of almost 7%. The only downside with this type of home is that the service charges may be high!

But it’s really all down to personal preference, personally I think these are great as they are a versatile home and these ones in Amington are especially beautiful. So why not pop down to the area one Sunday afternoon and have a look at a few?

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 www.tamworthpropertyblog.co.uk