£23m a year black hole in the Tamworth Property Market – Is Buy to Let Immoral? (Part 2)

 

An Englishman’s Home is His Castle as Maggie Thatcher lauded – everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Home ownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Tamworth buy to let properties as an investment. Tamworth first time buyers were in competition with Tamworth landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Tamworth landlords fanning the flames of the Tamworth housing crisis bonfire?

I believe that the landlords of the 3,300 Tamworth rental properties are not exploitive and are in fact, making many positive contributions to Tamworth and the people of Tamworth. Like I have said before, Tamworth (and the rest of the UK) isn’t building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

It doesn’t sound a lot of difference, so let us look at what this means for Tamworth …

For Tamworth to meet its obligation on the building of new homes, Tamworth would need to build 264 households each year. Yet, we are missing that figure by around 110 households a year.

For the Government to buy the land and build those additional 110 households, it would need to spend £23,199,927 a year in Tamworth alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent.

So only you, the reader, can decide if buy to let is immoral, but first let me ask this question – if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about!

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch!

Email me on Lorraine@hallandthompson.co.uk or call on 07531484956.

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

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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