Tamworth First Time Buyers Need 7.1 Times Annual Salary to Get on Housing Ladder

welcome to Tamworth
welcome to Tamworth

What is it to be British? Our stubbornness, long-suffering stoicism, our vexation at injustice, our obsession with football and rugby, we are weather obsessed external awkward noncommittal modest people whilst underneath seething like a volcano because someone jumped the queue….. and our No.1 obsession is with the property ladder.

This ‘love affair’ with owning our own home has been both good and bad for the UK as a whole. This has given people financial freedom in their later years whilst also reducing the quantity (and quality) of housing provision whilst adding the extra pressure of a ‘them and us’ society. Strong words I know .. but let me explain more.

I honestly believe that most Governments since the end of the 1970’s, Conservative and Labour, have attempted to nourish our addiction to home ownership (to keep the housing market on track) with the Council House Right to Buy sell off in the 1980’s, tax relief of mortgages, relaxation of the mortgage rules in the late 1990’s/early 2000’s and most recently, the Help to Buy scheme.

But the Brits haven’t always had this obsession.

Roll the clock back 100 years and, in 1918, just under a quarter of all Brits owned their own homes and the other 77% rented. Go back 50 years to 1968, and only 46% of people owned their own home, the rest rented. This homeownership thing is quite a recent phenomenon.

According to my research, anyone looking to get a foot onto the property ladder as a first-time buyer in Tamworth today, AS A SINGLE PERSON, would need to spend 7.1 times their earnings on a Tamworth first time buyer property.

Using the numbers from the Office of National Statistics (ONS), the average value of a first-time buyer property in Tamworth today is £139,000, compared to £116,000 in 2007. If we divide those property values by the average annual earnings of first time buyers – in 2007, that was £17,281 pa and that has risen to £19,673 pa .. giving us the ratio of 7.1 to 1.

However, what must be remembered is that these are raw statistics from the ONS and don’t take into account other factors, like most people buy their first home as a couple. Also, mortgage rates are at an all-time low and who can remember mortgage rates of 15%+ in the 1990’s, meaning borrowing today is relatively cheap. Also, 95% Loan to Value first time buyer mortgages have been available since the end of 2009  (i.e. you only need to save a 5% deposit) and first time buyer rates of 2.19% fixed for 5 years can be obtained (correct at time of writing this article)… it is cheaper to buy than rent .. fact!

I believe there has been a mind-set change to owning a home. Home ownership was the goal of the youngsters in the latter half of the 20th century. Britain is changing to a more European model of homeownership, where people rent in early to mid-life, wait to inherit the money from their parents when in their 50’s and then buy.. thus continuing the circle – albeit in a different way to the last Century.

This means the demand for privately rented accommodation will, in the long term, only continue to grow. If you would like to know more about where the hot spots are for that growth in Tamworth, then one place would be my property blog www.tamworthpropertyblog.co.uk or if you want to drop me an email or telephone call, feel free to pick my brain on the best places to buy (and not to buy) in Tamworth to ensure your rental investment gets you want you want. The choice is yours!

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 Property Market – Asking Prices Up 10.5% in the Last 12 Months

 

The average asking price of property in Tamworth increased by 10.5% or £24,289 compared to a year ago, with particularly good demand from landlords and home-movers in the first few months of the year. This takes the current average asking price to £254,954, compared with £230,665 this time last year.

The rise in asking prices is being aggravated by buyers jumping into action looking to benefit from potential stamp duty savings (especially first-time buyers) or beat impending mortgage interest rate rises later in 2018. Of the numerous Tamworth buyers starting their property hunting in the usually active spring market this year, many face paying even more than ever for the property of their dreams, although as I mentioned a few weeks ago, there are more properties for sale in Tamworth compared to 12 months ago.

Looking at the different sectors of the Tamworth property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices now compared to a year ago. Firstly, looking at the Pound note amounts …

Interestingly, when one looks at the percentages, the most upward average asking price pressure is in the terraced and semi-detached property type sectors, with both first-time-buyer and second-time-buyer properties at new Tamworth asking price highs.

Now, I must stress this growth in the asking prices of Tamworth property doesn’t mean the value of Tamworth property is going up by the same amount … nothing could be further from the truth.  Only time will tell if the current levels of Tamworth asking prices is a catch-up abnormality after a couple of months of restrained asking price rises in the first few months of 2018, or is it an initial sign that we are in for a better 2018 Tamworth Property market than all of us were expecting at the start of the year?

I believe these asking prices must be viewed with a pinch of salt, as it will be fascinating to see whether Tamworth properties actually sell at these higher asking prices. Just because house sellers (be they owner-occupiers or landlords liquidating their assets) are asking for more money it doesn’t mean buyers will be enthusiastic to part with their hard earned cash. Like my Mum and Dad used to say to me all those years ago, “You can ask … but you might not get”.

Also, Tamworth homeowners and landlords wanting to sell their property need to be aware of progressively strained buyer mortgage affordability and the more those sellers increase asking prices, the more buyers will hit their maximum on the amount they are able borrow on a mortgage.

However, those Tamworth buyers who need a mortgage (be they owner-occupier or landlord), will paradoxically benefit from lower mortgage payments before interest rates rise … maybe another reason for the uplift in the number first time buyers and landlords buying? Only time will tell!

Want to know where those Tamworth buy to let bargains are?  Follow my Tamworth Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Tamworth, many local landlords ask me my thoughts, opinion and advice on what (and not) to buy locally … and I wouldn’t want you to miss out on those thoughts … would you?

If you want to learn about the Tamworth Property Market , one source for information is the Tamworth Property Blog authored by yours truly at https://www.tamworthpropertyblog.co.uk

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