‘Generation Rent (Forever)’ – 2,961 Tamworth Tenants have no intention of ever buying a property to call home

Generation rentThe good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts … those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Tamworth (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Tamworth property ladder.

However, I would say there has been something else at play other than the issue of raising a deposit – having sufficient income and rising property prices in Tamworth. Whilst these are important factors and barriers to home ownership, I also believe there has been a generational change in attitudes towards home ownership in Tamworth (and in fact the rest of the Country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Tamworth population choose to be tenants as it better suits their plans and lifestyle. Local Government in Tamworth (including the planners – especially the planners), land owners and landlords need an adaptable Tamworth residential property sector that allows the diverse choices of these Tamworth 20 and 30 year olds to be met.

This means, if we applied the same percentages to the current 7,711 Tamworth tenants in their 3,300 private rental properties, 2,961 tenants have no plans to ever buy a property – good news for the landlords of those 1,267 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

.. but does that mean the other third will be buying in Tamworth in the next 12 months?

Who is planning to buy a Tamworth property soon

Tamworth Tenants

Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.  The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Tamworth, we will in fact need an additional 1,414 private rental properties over the next eight years (or 177 a year) … meaning the number of private rented properties in Tamworth is projected to rise to an eye watering 4,714 households.

For more insight and thoughts like this on the Tamworth Property Market – please visit the Tamworth Property Blog at https://www.tamworthpropertyblog.co.uk

Are you looking to get into the rental market, have you seen a property and you’re not sure if it’s a good buy? Why not give me a call to discuss 01827 425195 or email me  lorraine@hallandthompson.co.uk

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Ask Lorraine – Legionella Certification. Surely, this isn’t a legal requirement for landlords?

🙋  Landlord’s Question: 

”Dear Lorraine,

I’ve just been talking to another landlord and he asked who I use to carry out my Legionella certification?  Surely he’s mistaken, this isn’t a legal requirement for landlords? If it is, why hasn’t it been all over the press.

Legionella
Surely I don’t have to do this?

Lorraine’s Answer

Yes, this is a legal requirement, it started to apply for normal domestic properties in 2013. Guidelines state that the risk assessment must be carried out by a competent person, so there is no reason why you as that person cannot complete this yourself.

Review the risk assessment regularly as a matter of course and update it, should things change.

Simple control measures can help control the risk of exposure to legionella such as:

  • flushing out the system prior to letting the property
  • Cold water tanks should have tight fitting lids thus avoiding debris getting into the system
  • setting control parameters  to ensure water is stored at 60°C)
  • make sure any redundant pipework is removed

Why not send your tenants regular do’s and  don’ts information sheets on the control of legionella,  get them involved.

  • do clean  shower heads on a regular basis
  • do inform the landlord if the hot water is not heating correctly
  • don’t adjust temperature control settings of the calorifier
  • do run taps and shower heads if you leave the property empty more than a few weeks

To read more  HSE guidlines click   http://www.hse.gov.uk/legionnaires/legionella-landlords-responsibilities.htm

Until next week.

 

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!

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Tamworth First Time Buyers borrow £55.9m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Tamworth property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 1,165 properties have sold (and completed) in Tamworth, worth £223.8m. Interestingly the number of properties changing hands in Tamworth has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Tamworth buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Tamworth property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Tamworth itself, first time buyers have borrowed more than £55.9m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Tamworth economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at the Tamworth market, at this moment in time there are an impressive 300 properties for sale, so lots of choice. All this will be welcome news amongst Tamworth first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Tamworth property market like this, you might want to visit the Tamworth Property Market Property Blog www.tamworthpropertyblog.co.uk

If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property.

Email me on lorraine@hallandthompson.co.uk or call on 01827 425195

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With 7,711 people in Private Rented Properties in Tamworth – Should you still be investing in Tamworth Buy To Let?

If I were a buy to let landlord in Tamworth today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Tamworth property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Tamworth property prices do drop, the downside to that is that first time buyers could be attracted back into the Tamworth property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Tamworth landlord, almost a blessing in disguise.

Tamworth has a population of 73,572, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

Tamworth – Accommodation Type and the Number of Occupiers
Owned outright – Tamworth Owned with a mortgage – Tamworth Shared ownership (part owned and part rented) – Tamworth Social rented (aka Council Housing) –  Tamworth Private rented – Tamworth Living rent free – Tamworth
16,678 34,977 315 13,432 7,711 459
22.7% 47.5% 0.4% 18.3% 10.5% 0.6%

Yields will rise if Tamworth property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Tamworth landlords add to their portfolio. Rental demand in Tamworth is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Tamworth landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I have just come back from a visit to my husbands relations after a family get together. I got chatting with my husbands nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Tamworth and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a 50 something, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 10.5% of Tamworth people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Tamworth – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

For more views and opinions on the Tamworth Property Market – visit the Tamworth Property Market Blog https://www.tamworthpropertyblog.co.uk

Give me a call or drop me an email lorraine@allandthompson.co.uk if you would like a chat or a cup of coffee and we can talk houses, houses, and more houses.

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Ask Lorraine – My tenant has refused to supply a forwarding address

🙋  Landlord’s Question: 

”Dear Lorraine,

My tenant has refused to supply a forwarding address, how can I  inform the relevant authorities if I don’t have the information?

My tenant has refused to supply a forwarding address

Lorraine’s Answer

I don’t know anywhere that says it’s a legal requirement to leave a forwarding address, however I’m a little concerned why the tenant did not feel able or want to give you this.

Did the tenancy end on friendly terms?

As a tenancy ends do you advise your tenants, that  in order to send mail on that has not been redirected, you require a forwarding address. It’s surprising the number of people who do not redirect mail!

Do you take a deposit – I’m sure the tenant would like their deposit back quickly. Then you require a forwarding address to enable you to complete the Deposit Return process forms. Without a forwarding address the deposit can take many months to be returned to either the tenant or landlord. I usually find that tenants are only too willing to give me their forwarding address where a deposit is involved.

If you do take a forwarding address, don’t forget to advise the utility companies including all meter readings and of course don’t forget to advise the local council so that they can chase any outstanding council tax.

Until next week.

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! https://www.tamworthpropertyblog.co.uk

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Ask Lorraine – My sole trader letting agent has died and his accounts are frozen!!

🙋 Landlord’s Question: 

“I’m a landlord of two houses. I use an agent to manage them. He is a sole trader and really the business is him. RIP
He was a terrific man and sadly he died last week.
I spoke with his widow when the rent for one of the houses didn’t come to me. She explained about his death and that the bank account to which the rents go to have been frozen by the bank.
I want to support her as much as I can, but at the same time need to ensure that I can recover any monies due to me and all future monies are not frozen.
Can you help?”

ask Lorraine

Lorraine’s Answer

This is very sad for all concerned.

If he was a sole trader, then all contracts that you had with him ceased at the point he died.
If the account was frozen, the tenant should have had the money returned to them. However, if any money is still sitting in his account owable to you, you may find it trickier to claim, although I am sure that his executor will be cooperative.
I think that the money might need to be returned to the tenant and for you to then have them pay you directly.
Obviously important to get new payment details to the tenants as well.

As he was a sole trader, anything he owed to you must now be paid to you by his estate. Write to the executor and / or his wife asking for the money, albeit with some tact.

As the management contract was ended by his death, you are free to make arrangements with any other agent you wish.

Until next week.

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.

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