Tamworth House Prices vs Tamworth Rents since 2006

The Tamworth housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Tamworth, the market has certainly changed for both buyers and sellers alike (be they Tamworth buy to let landlords, Tamworth first time buyers or Tamworth owner occupiers looking to make the move up the Tamworth property ladder).

Tamworth house values are 7.67% higher than a year ago, and the rents Tamworth tenants have to pay are 1.6% higher than a year ago

When we compare little old Tamworth to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back…

Since 2006, Tamworth house values are 35.36% higher, yet the rents Tamworth tenants have had to pay for their Tamworth rental property are 17.7% higher

Rent Vs House Prices
Rent Vs House Prices

 

…which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Tamworth tenants are 24.3% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Tamworth house values (in red) in the years of 2008 and 2009 … yet as Tamworth property values started to rise after the summer of 2009, see how Tamworth rents dipped 6/12 months later (the yellow bars)…. Fascinating!

So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Tamworth property.

However, maybe an even more interesting point is for the long-term Tamworth buy to let landlords. The performance of Tamworth rental income vs Tamworth house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Tamworth landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Tamworth buy to let portfolio. More and more I am sitting down with both Tamworth landlords of mine and landlords of other agents who might not be trained in these skills – to carry out an MOT style check on their Tamworth portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind – the choice is yours.

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Things to consider when buying a Tamworth Buy-to-let property

If you are thinking of becoming a Buy-to-Let Landlord there are many things to consider when looking for a property. The most important – what exactly are you looking to achieve.

welcome to Tamworth
welcome to Tamworth

It may be income, capital growth or an investment that can be passed down to your children or a combination of all of these.

Not all properties meet each of these criteria to the same degree. As a general rule property with a high yield is more likely to suffer low capital growth and the reverse is also true.

Most landlords try to buy a property that has a sensible growth potential with a yield that will at least cover their costs.

Average yield in Tamworth? 4% to 6%

Generally a two bedroom modern house which is in a good location is the best buy.

Victorian may have lots of character and appeal but the maintenance of these properties tend to be higher.

A flat will usually be leasehold so you have the annual service charges to consider. Flats tend to have a lower capital growth as there are usually quite a few on the market.

A three bedroom house  is a good buy however there will be more wear and tear from a family occupying the property so your maintenance charges are generally higher.

If you are sitting on the fence and contemplating when’s the right time to buy ? well it’s a bit like having  kids – when is the right time to start a family. By procrastinating and never committing, your property journey will never start!

Our property journey started some 10 years ago with at least another 10 years spent hesitating. When we finally did dip our toes into the Buy-to-Let market it was the best thing we ever did, that is apart from starting our family.

Don’t forget …You will have to pay stamp duty for second home purchases,. Details here

There are some advantages  of setting up a limited company to purchase the property, but they are limited unless you are buying several properties. An accountant will be able to advise.

Almost certainly  you will need to pay income tax on the income, but you should take advice from an accountant and you will need to complete tax returns annually.

You will need to pay CGT  (capital Gains Tax) when you sell assuming the profit exceeds your annual allowance and purchasing costs. There are things you can do to mitigate this cost which your accountant can help you with.

So like us, if you are in property for the long haul, you won’t get rich quickly however you will make money in years to come and you may even enjoy being a property landlord!

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  –

http://www.Tamworthpropertyblog.co.uk

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Happy House Hunting

Ask Lorraine – I’m looking to get into buy to let in Tamworth

🙋  Landlord’s Question: 

I’m  looking to get into buy to let to help the shortfall in my pension which the government has stolen from me.  I’m keen to buy in Tamworth,  any quick hints and tips?

Welcome to Tamworth
Welcome to Tamworth

Lorraine’s Answer:

If you are considering becoming a landlord and buying a property to let out there are many things to consider. I think the number one thing is to decide exactly what you are looking to achieve.

Is it purely an income to subsidise your pension, capital growth, or even an investment that can be passed onto your children that you are looking for?

As a rule of thumb, you generally find that property with a high yield does not obtain a high capital growth and property with a high capital growth does not usually net a high yield.

The majority of landlords tend to buy a property that can give a decent growth potential with a yield that covers their costs plus a little extra.

The average yields in Tamworth are 5 % – 6%

So what  should you buy?

Landlords tend to buy locally to them as they have the knowledge of their own area and do not want to travel too far if they manage their own  properties.

I personally like a Victorian house, lots of character unlike the boxes of today, however the purse strings tend to be open a lot more on these properties, so I would say a two bedroom modern house which is in a good location would be a good bet.

Always buy a freehold property so that you don’t have the yearly maintenance charge eating into your yield and I wouldn’t recommend  buying a four bed if you are looking at single lets. Generally the bigger the house the lower the yield, plus larger properties tend to have more wear and tear from having a large family in residence.

Take into consideration any fees to purchase the Buy to Let before you start your property journey, stamp duty is payable… Details here

and have you sought advice as to any advantages of setting up a limited company, it’s usually only an advantage if you are purchasing a number of Buy to Lets, are in the higher tax band or looking to become a property tycoon.

Buy to let is still a good source of income even with the Government screwing over landlords. I’m always banging on about capital growth, so purchasing a Buy to Let should be a long term plan and not for the faint hearted, buy today and jump tomorrow.

*** 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.  http://www.Tamworthpropertyblog.co.uk

https://www.facebook.com/hallandthompsonestateagents

http://www.hallandthompson.co.uk

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

 

Pants Yield – But Plenty Of Capital Growth Potential – Two Gates, Tamworth

How’s this for a ship shape and ready to go deal? You don’t get more ready to go than a newbuild, do you? This 3 bedroom detached house in Tamworth  is part of a newbuild development in the Two Gates  area, which has always been a highly sought after area and continues to grow in popularity. The property is being marketed by Morris Homes  01827 796843  at £244,750.

The yield may be pants but if you are a landlord and it in for the long haul, then the capital growth may temp you? Interested then why not call Morris Homes for a viewing.

Newbuild

 

 

 

 

 

 

‘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:

Follow The Buy-To-Let Property Investment Market in Tamworth

Lorraine’s Tamworth Property Market LinkedIn Page

Hall and Thompson Estate Agents Tamworth Facebook Page

Tamworth Hall and Thompson Estate Agents Twitter Page

Hall and Thompson Estate Agents Website