Tamworth Tenant’s Deposits held total £2,458,500

With the Government preparing to control tenant’s deposits at five weeks rent, Tamworth landlords will soon only be protected in the event of a single month of unpaid rental-arrears, at a time when Universal Credit has seen some rent arrears quadrupling and that’s before you consider damage to the property or solicitor costs.

It can’t be disputed that the deposits Tamworth tenants have to save for, certainly raises the cost of renting, putting another nail in the coffin of the dream of home ownership for many Tamworth renters. At the same time, those same deposits being unable to provide Tamworth landlords with a decent level of protection against unpaid rent or damage to the property.

In fact, the total of all the tenants’ deposits in

Tamworth, deposited or protected, is £2,458,500

When you consider the value of all the privately rented properties in Tamworth total £705,361,800, the need for decent landlord insurance to ensure you are adequately covered as a Tamworth landlord is vital.

However, I want to consider the point of view of the Tamworth tenant.  Several housing charities believe spending more than a third of someone’s salary on rent as exorbitant, yet for the tenants they find themselves in that very position.  I feel especially sorry for the Tamworth youngsters in their 20’s who want to rent a place for themselves, as they face having to pay out the rent and try and save for a deposit for a home.

The average 22 to 29-year-old in Tamworth spends 33% of their typical salary on a one bed rental property

….and 39% of their salary for a 2-bed home in Tamworth.

40 years ago, British people who rented spent an average of 10% of their salary on rent, and only 14% in London.  Looking in even greater detail, according to the ONS, over the past 60 years the proportion of total spending on all housing (renting and mortgages) has doubled from 9% in the late 1950’s to 18% today.  Whilst on the other hand, the proportion of total expenditure on food has halved (33% to 16%), as has the proportion of total spending on clothing (10% to 5%) … it’s a case of swings and roundabouts!

Yet landlords also face costs that need to be covered from rents including mortgages, landlord insurance (especially the need for the often-inadequate deposits to cover the loss of rent and damage), maintenance and licensing.  In fact, rents in the last 10 years have failed to keep up with UK inflation. So in real terms, landlords are worse off when it comes to their rental returns (although they have gained on the increase in Tamworth property values – but that is only realised when a property sells).

There are a small handful of Tamworth landlords selling some/or all of their rental portfolio as their portfolios become less economically viable with the recent tax changes for buy to let landlords, which will result in fewer properties available to rent.

However, this will reduce the supply and availability of Tamworth rental properties, meaning rents will rise (classic textbook supply and demand), thus landlords return and yields will rise.  Yet, because tenants still can’t afford to save the deposit for a home (as we discussed above) and we are all living longer, the demand for rental properties across Tamworth will continue to grow in the next twenty to thirty years as we turn to more European ways where the norm is to rent rather than buy in the 20’s and 30’s age range. This will mean new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Tamworth and enjoy those higher yields and returns … isn’t it interesting that things mostly always go full circle?

⁉️ Why don’t you download your FREE Landlord eGuide ‘How To Avoid Tenants From Hell’ now by clicking the link below and then ‘Get Started’ & ‘Send it Now’

👉 https://m.me/Hallandthompsonestateagents?ref=w2729741

The eGuide will then be messaged to you instantly after a few clicks and your contact details are not needed.

https://www.facebook.com/hallandthompsonestateagents

Tamworth House Prices up 31.5% in the last 5 Years

Over the last 5 years, we have seen some interesting subtle changes to the Tamworth property market as buying patterns of landlords have changed ever so slightly.

The background to this story was the recently published set of buy-to-let (BTL) lending statistics. Roll the clock back 12 months and 6,700 BTL mortgages were granted (in the same month) for £900m, meaning the average BTL mortgage was £134,200. Looking at last month’s figures, and as one might expect with the Brexit issue overhanging the property market, the lending figures were down, yet not by the amount I originally thought. Last month, just over 6,100 new buy-to-let mortgages were granted for a total sum of £800m (meaning the average landlord mortgage was a respectable £131,100). Yet, when I looked back to the boom year of the 2014 property market, in the corresponding same month, only £1,030 million was borrowed on 8,300 buy-to-let properties (meaning the average buy-to-let mortgage was £124,100). It seems Brexit is having no effect on landlords buying habits.

Looking closer to home in Tamworth, throughout 2018, I have been regularly chatting to more and more landlords, be they seasoned professional Tamworth BTL landlords or FTL’s (first time landlords) and their attitude is mostly positive. Instead of reading the scare-papers (oops sorry newspapers), those Tamworth landlords that look with their eyes, will see the Tamworth property market is doing reasonably well, with medium term rents and property values rising; as quite obviously from the mortgage figures .. landlords are still buying.

The question I get asked all the time is .. “What type of buy-to-let property should I buy?  You can make money from property through both the rent (expressed as a yield when compared to the value of the property) and how the actual value of the home itself changes.

Since 2014, property values in Tamworth have risen by 31.5%.

We have records of what each type of property (i.e. Detached/Semi/Terraced/Apartments) has achieved per square metre going back 20 years … and looking back over the last 5 years, these are the numbers ..

They all look to have similar percentage uplifts, however as you can see from the table there is in fact some variation throughout and although only slight this can equate to thousands of pounds in monetary terms.

This has proved that semis and terraced houses have performed the best .. although like the £/Sq.M figures, these are just averages. When investing, whilst Tamworth apartments haven’t been the best performers in terms of capital growth, they do tend to generate a slightly better yield than houses, probably because several sharers can afford to pay more than a single family. But houses tend to appreciate in value more rapidly and may well be easier to sell, simply because there are fewer being built.

Now these are of course averages, but it gives you a good place to start from. The bigger picture here though is this – irrespective of what is happening in the world, be it Brexit/no Brexit, China, Trump, whatever, Tamworth people still need a roof over their heads and we as a Country haven’t built enough homes to keep up with the demand since the late 1980’s. This means even if we have a short term wobble in 2019 when it comes to property values ..in the medium term, demand will always outstrip supply and prices and rents will increase – because, I doubt the local authority, let alone Westminster, have the billions of pounds required to build the one hundred thousand Council houses per year nationally for the next decade to fix this issue – meaning as the population increases, the only people who can fulfil the demand for accommodation in the medium term is the private BTL landlord.

Before I go …on average, housing associations and local authorities have built around 26,500 houses each year since 2010. The Labour government had a lower average, building about 19,000 homes per year, yet in the 1960’s, under both administrations, 180,000 councils were built per year!

Many of you reading my blog ask why I say these things. I want to share my thoughts and opinions on the real issues affecting the Tamworth property market, warts and all. If you want rose tinted glasses articles – then my articles are not for you. However, if you want someone to tell you the real story about the Tamworth property market, be it good, bad or indifferent, then maybe you should start reading my blog regularly.

⁉️ Why don’t you download your FREE Landlord eGuide ‘How To Avoid Tenants From Hell’ now by clicking the link below and then ‘Get Started’ & ‘Send it Now’

👉 https://m.me/Hallandthompsonestateagents?ref=w2729741

The eGuide will then be messaged to you instantly after a few clicks and your contact details are not needed.

https://www.facebook.com/hallandthompsonestateagents

25.9% of All Tamworth Properties were Bought Without a Mortgage in the Last 7 Years

Tamworth
Tamworth

For most Tamworth people, a mortgage is the only way to buy a property. However, for some, especially Tamworth homeowners who have paid off their mortgage or Tamworth buy to let landlords, many have the choice to pay exclusively with cash. So the question is, should you use all your cash, or could a mortgage be a more suitable option?

Well, looking at the numbers locally…

1,784 of the 6,890 property sales in the last 7 years in Tamworth were made without a mortgage (i.e. 25.9%)

Interesting when compared with the national average of 31.9% cash purchases over the last seven years. Next, I wanted to see that cash percentage figure split down by years. As you can see from the graph, this level of cash purchases vs mortgage purchases has remained reasonably constant over those seven years…

Next, if you are going to go for a mortgage, the next question has to be whether you should fix the rate or have a variable rate mortgage. In the last Quarter, 90.57% of people that took out a mortgage, had a fixed rate mortgage at an average interest rate of 2.27%, although what did surprise me was only 65.79% of the £1.429 trillion mortgages outstanding in the whole of the UK were on a fixed rate.

The level of mortgage debt compared to the value of the home itself (referred to as the Loan to Value rate – LTV) was interesting, as 61.9% of people with a mortgage have a LTV of less than 75%. Although, one number that did jump out at me was only 4.33% of mortgages are 90% and higher LTV – meaning if we do have another property slump, the number of people in negative equity will be relatively small.

Next, looking at the actual number of properties sold, it can be clearly seen the number of house sales has dipped slightly in 2018…

So those are the numbers … let us have a look at the pros and cons of taking a mortgage, with specific focus on Tamworth buy to let landlords.  

Taking a mortgage will help a landlord increase their investment across more properties to maximise the return, rather than putting everything into one Tamworth buy to let property. This will enable the landlord to ensure if there a void in the tenancy, there should still be rent coming from the other properties. The flip side of the coin is that there is a mortgage to pay for, whether or not the property is let.

The other great motivation of taking a mortgage is that landlords can set the mortgage interest against the rental income, although that will only be at the basic rate of tax by 2021 due the recent tax changes. Banks and Building Societies will characteristically want at least a 25% deposit (meaning Tamworth landlords can only borrow up to 75%) and will assess the borrowing level based on the rental income covering the mortgage interest by a definite margin of 125%.

A lot will depend on what you, as a Tamworth landlord, hope to attain from your buy to let investment and how relaxed you would feel in making the mortgage payments when there is a void (interestingly, Direct Line calculated a few months ago that voids cost UK landlords around £3bn a year or an average of £1000 per property per year). You also have to consider that interest rates could also increase, which would eat into your profit … although that can be mitigated with fixing your interest rate (as discussed above).

So, with everything that is happening in the world, does it make sense to buy rental properties? Now we help many newbie and existing landlords work out their budgets, taking into account other costs such as agent’s fees, finance, maintenance and voids
in tenancy.

The bottom line is we as a country aren’t building enough property, so demand will always outstrip supply in the medium to long term, meaning property values will keep rising in the medium to long term. That’s not to say property values might fall back in the short term, like they did in 2009 Credit Crunch, the 1988 Dual MIRAS crash, the recession of the early 1980’s, the 1974 Oil Crisis, the early 1930’s Great Depression … yet every time they have bounced back with vigour. Therefore, it makes sense to focus on getting the best property that will have continuing appeal and strong tenant demand and to conclude, buy to let should be tackled as a medium to long term investment … because the wisest landlords see buy to let investment in terms of decades – not years.

Why don’t you download your FREE Landlord eGuide ‘How To Avoid Tenants From Hell’ now by clicking the link below and then ‘Get Started’ & ‘Send it Now’The eGuide will then be messaged to you instantly after a few clicks and your contact details are not needed.


Don’t forget to download our free Landlord eGuide ‘How to avoid tenants from hell’ simply click the link in the post and you will get a copy messaged to you instantly and no contact details are needed 


👉 https://m.me/Hallandthompsonestateagents?ref=w2729741


https://m.me/Hallandthompsonestateagents?ref=w2729741

https://m.me/Hallandthompsonestateagents?ref=w2729741

https://www.facebook.com/hallandthompsonestateagents

https://www.hallandthompson.co.uk

Tamworth Road … the road where people move the most in Tamworth!

Many folks say moving home is the most stressful thing.Moving home is like someone (and that someone is usually you and you are the cause of this devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like a Amazon delivery van, only to spend the next six months unpacking it all, whilst unable to find important things like your bank cards, ‘those’ shoes or special jewellery!

We wish we could be instantly transported like in Star Trek “Beam me up Scotty to a blissful moved in state”.  Yet the week you move, it’s like an episode from the original 1960’s series Star Trek, when the crew had a transporter accident with an ion-storm sends Kirk and Spock into an alternate reality, where the caring Federation is the merciless Terran Empire, and the USS Enterprise is a warship and chaos eschews!!!

Star Trek aside, when you decide to move and before the stress of living out of cardboard boxes for months descends; first you trawl the portals (Rightmove/Zoopla/On The Market) to find a new house, which out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. Then, you will arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but minutes to spend hundreds of thousands of pounds on their next home!).  Then you put your property on the market with an estate agent, find a buyer for your Tamworth property, agree a price for both, then instruct solicitors. The property becomes sold ‘subject to euphuism’ … sorry ‘contract’ … as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, whilst you can’t get too attached to the property you want to purchase in case the sale falls through … phew – stressful or what??!!

Is it worth it? Worth the stress? The brown cardboard boxes? Well many Tamworth people think so.

In the last 12 months, 629 families have sold and moved home in Tamworth (B77)

Yet the question I want raise is … do people on certain streets in the B77 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in the B77 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was a correlation between price and moving). So initially looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Tamworth Road is the winner with an average of 22.17 house sales per year (since 1995) as on the graph below.

And to look at the bigger picture, the table below shows the top 25 streets, with the average value of a property on that street.  As you can see, there is no correlation between the average value of a property and the number of times a property gets sold on that street.

Street Average Value of a Property
On that Street/Road
Average Number of
Properties Sold per Year (since 1995)
Tamworth Road £175,855 22.17
Celandine £181,733 11.04
Furness £145,066 10.52
Peel Drive £174,471 10.00
Kettlebrook Road £134,067 9.70
Glascote Road £158,820 8.57
Hockley Road £169,509 8.43
Sycamore £144,656 8.17
Grazier Avenue £172,175 7.30
Brambling £149,886 7.09
Ascot Drive £255,583 7.09
Emberton Way £263,000 7.00
Moor Lane £130,773 7.00
Foxglove £160,665 6.70
Loughshaw £156,628 6.65
Watling Street £134,811 6.78
Lindisfarne £234,523 5.87
Goldsborough £146,119 5.91
Amington Road £153,416 5.87
Wilnecote Lane £161,259 5.61
Quince £138,920 5.57
Greenheart £160,455 5.43
Grassholme £142,813 5.48
Broadlee £253,987 5.30
Valley Drive £204,703 5.13

However, I still felt the information wasn’t telling the whole story … some roads in Tamworth have many more properties on than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold more often) than the rest of the locality.

In the next article, (and I promise I won’t mention Star Trek again), I will answer that question in great depth … and the results should (as they did me) certainly raise an eyebrow. The question is … do you live on one the top 25 Tamworth most saleable streets in Tamworth (B77)?  

Come back to my Tamworth Property Blog for the next articleto find out!

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  – https://www.Tamworthpropertyblog.co.uk

Facebook – – https://www.facebook.com/hallandthompsonestateagents

Twitter – https://twitter.com/hallandthompson

Website  –  https://www.hallandthompson.co.uk

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

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

Blog  – https://www.Tamworthpropertyblog.co.uk

Facebook – – https://www.facebook.com/hallandthompsonestateagents

Twitter – https://twitter.com/hallandthompson

Website  –  https://www.hallandthompson.co.uk

Buying A Tamworth Property With An Existing Tenant

Additional 1,414 Tamworth Rented Homes Required by 2027

I have been doing some research, looking both at National and Regional reports on the demand and supply of property and people together with future projections on the economy, population and family demographics with some interesting results.  According to the Office of National Statistics, in the last financial year nationally, private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social (aka council and housing association) stock increased by 12,000 dwellings.

It was the private rental figures that caught my eye.  With eight or nine years of recovery since the Credit Crunch, economic recovery and continuing low interest rates have done little to setback the mounting need for rented housing.  In fact, with house price inflation pushing upwards much quicker than wage growth, this has meant to make owning one’s home even more out of reach for many Millennials, all at a time when the number of council/social housing has shrunk by just over 2.5% since 2003, making more households move into private renting.

There are 7,711 people living in 3,300 privately rented

properties in Tamworth.

In the next nine years, looking at the future population growth statistics for the Tamworth area and making careful and moderate calculations of what proportion of those extra people due to live in Tamworth will rent as opposed to buy, in the next ten years, 3,305 people (adults and children combined) will require a private rented property to live in.

Therefore, the number of Private Rented homes in Tamworth will need to rise by 1,414 households over the next nine years,

That’s 157 additional Tamworth properties per year that will need to be bought by Tamworth landlords, for the next nine years to meet that demand.

… and remember, I am being conservative (with a small ‘c’) with those calculations, as demand for privately rented homes in Tamworth could still rise more abruptly than I have predicted as I would ask if Theresa May’s policies of building 400,000 affordable homes (which would syphon in this 5-year Parliamentary term is rather optimistic, if not fanciful?

% of properties bought as BTL since 2016
% of properties bought as BTL since 2016

So, one has to ask wonder if it was wise to introduce a buy to let stamp duty surcharge of 3% and the constraint on mortgage tax relief could curtail and hold back the ability of private landlords to expand their portfolios?

Well a lot of landlords are taking on these new hurdles to buy to let and working smarter.  Buying the property at the right price and using an agent to negotiate on your behalf (we do this all the time) … and the 3% stamp duty level isn’t an issue.  Incorporating your property portfolio into a Limited Company is also a way to circumnavigate the issues of mortgage tax relief (although there are other hurdles that need to be navigated on that tack), but just look at the growth of proportion of Buy to Let properties in the Country since the Summer of 2016 … something tells me smart Landlords are seeing these challenges as just that … challenges which can be overcome by working smarter.

I have a steady stream of Tamworth landlords every week asking me my opinion on the future of the Tamworth property market and their individual future strategy and, whether you are a landlord of mine or not, if you ever want to send me an email or pop into my office to chat on how you could navigate these new Buy to Let waters … it will be good to speak to you (because you wouldn’t want other landlords to have an advantage over you – would you?).

Until next time, happy house hunting.

Blog  –    https://www.Tamworthpropertyblog.co.uk

Facebook – – https://www.facebook.com/hallandthompsonestateagents

Twitter – https://twitter.com/hallandthompson

Website  –  https://www.hallandthompson.co.uk

361 First Timer Buyers in Tamworth Bought Their First Home in 2017

A little bit of good news this week on the Tamworth Property Market as recently released data shows that the number of first time buyers taking out their first mortgage in 2017 increased more than in any other year since the global financial crisis in 2009. The data shows there were 361 first time buyers in Tamworth, the largest number since 2006.

I expect in 2018 that this increase of first time buyers will level out and maybe dip slightly as, nationally, figures demonstrate that first time buyer’s average household income was £40,691 and this represented 17.3% of their take home pay. Although, it might surprise readers that it is actually cheaper to buy than it is to rent at the ‘starter home’ end of the housing market. Many of you can remember mortgage rates at 12% … even 15%. Today, at the time of writing this article, I found on the open market, 189 first time buyer mortgages at 95% (meaning only a 5% deposit was required) with 3 year fixed rates from a reputable High Street bank at 2.49% … they even did a 3 year fixed rate 100% mortgage for 2.89%!

Interestingly, looking at the other end of the market, the buy-to-let investment in Tamworth was subdued, with only 74 buy-to-let properties being purchased with a mortgage. However, I must stress, whilst there is no hard and fast data on the total numbers of landlords buying buy-to-let, as HM Treasury believes only 30% to 40% of buy-to-let property is bought with a mortgage. This means there would have been further cash only buy-to-let purchases in Tamworth – it’s just that the data isn’t available at such a granular level.

In terms of the level of mortgage debt in Tamworth, looking specifically at the B77 to B79 postcodes, there has been a steady rise in borrowing over the last couple of years.

This is pleasing to see, as new mortgage debt is created by first time buyers, buy-to-let landlords and home movers themselves, that is being roughly equalled by the amount being paid off with mature mortgaged homeowners in their 50’s and 60’s finally paying off their mortgage.

So, what does all this mean for the Tamworth Property Market?  Well, the stats paint a picture, but they don’t inform us of the whole story. The upper end of the Tamworth property market has been weighed down by the indecision around the Brexit negotiations and rise in stamp duty in 2014, when made it considerably more expensive to buy a home costing more than £1m. The middle part of the Tamworth property market has been affected by issues of mortgage affordability and lack of good properties to buy, as selling prices have reached the limit of what buyers can afford under existing mortgage regulations. The lower to middle Tamworth property market was hit by tax changes for buy-to-let landlords, although this has been offset by the increase in first time buyers.

If you are in the market and selling now and want to ensure you get your Tamworth property sold, the bottom line is you have to be 100% realistic with your pricing from day one and you might not get as much as you did say a year ago (but the one you want to buy will be less – swings and roundabouts?). I know it’s not comfortable hearing that your Tamworth home isn’t worth as much as you thought, but Tamworth buyers are now unbelievably discerning.

So, if you are thinking of selling your Tamworth property in the coming months, don’t ask the agent out a few days before you want to put the property on the market, get them out now and ask them what you need to do to ensure you get maximum value in the shortest possible time. I, like most Tamworth agents, will freely give that advice to you at no cost or commitment to you.

if you would like to read more articles on my thoughts on the Tamworth property Market – please visit the Tamworth Property Market Blog

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

https://www.facebook.com/Hallandthompsonestateagents/

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

https://www.linkedin.com/in/lorrainethompson2/

http://www.hallandthompson.co.uk

https://twitter.com/hallandthompson

With Tamworth Annual Property Values 11.3% Higher, This is My 2018 Forecast

 

Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Tamworth property market.

With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 3.5% in Tamworth, which has contributed to maintain a decent level demand for property in Tamworth in 2017 (interestingly – an impressive 1,229 Tamworth properties were sold in last 12 months), whilst finally, the number of properties for sale in the town has remained limited, thus providing support for Tamworth house prices, meaning …

Tamworth Property Values are 11.3% higher than a year ago

However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.

In terms of what will happen to Tamworth property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.

Nevertheless, the bottom line is Tamworth homeowners and Tamworth landlords should be aware of what happens in the rollercoaster housing market of Central London, but not panic if prices do drop suddenly there in 2018. Over the last 8 years, the Central London property market has been in a world of its own (Central London house prices have grown by 89.6% in those last 8 years, whilst in Tamworth, they have only risen by 35.5%). So we might see a heavy correction in the Capital, whilst more locally, something a little more subdued.

Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact … I am sure we can get through this together as well?

Oh, and house prices in Tamworth over the next 12 months? I believe they will end up between 0.4% lower and 1.2% higher, although it will probably be a bumpy ride to get to those sorts of figures.

If you would like to read more articles on my thoughts on the Tamworth property Market – please visit the Tamworth Property Market Blog

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

https://www.facebook.com/Hallandthompsonestateagents/

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

https://www.linkedin.com/in/lorrainethompson2/

http://www.hallandthompson.co.uk

https://twitter.com/hallandthompson

Tamworth Buy-to-Let Return / Yields – 3% to 8.5% a year

The mind-set and tactics you employ to buy your first Tamworth buy to let property needs to be different to the tactics and methodology of buying a home for yourself to live in. The main difference is when purchasing your own property, you may well pay a little more to get the home you (and your family) want, and are less likely to compromise. When buying for your own use, it is only human nature you will want the best, so that quite often it is at the top end of your budget (because as my parents always used to tell me – you get what you pay for in this world!).

Yet with a buy to let property, if your goal is a higher rental return – a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite. Inexpensive Tamworth properties can bring in bigger monthly returns. Most landlords use the phrase ‘yield’ instead of monthly return. To calculate the yield on a buy to let property one basically takes the monthly rent, multiplies it by 12 to get the annual rent and then divides it by the value of the property.

This means, if one increases the value of the property using this calculation, the subsequent yield drops. Or to put it another way, if a Tamworth buy to let landlord has the decision of two properties that create the same amount of monthly rent, the landlord can increase their rental yield by selecting the lower priced property.

To give you an idea of the sort of returns in Tamworth…

The average buy to let yields in Tamworth
The average buy to let yields in Tamworth

 

Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Tamworth area.

As we move forward, with the total amount of buy to let mortgages amounting to £199,310,614,000 in the country, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions. Landlords are looking to maximise their yield – and are doing so by buying cheaper properties.

The average range of buy to let yields in Tamworth
The average range of buy to let yields in Tamworth

 

 

However, before everyone in Tamworth starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Tamworth buy to let property to buy.  Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too. Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. Landlords can also make money if the value of the property goes up and for those Tamworth landlords who are looking for capital growth, an altered investment strategy may be required.

In Tamworth, for example, over the last 20 years, this is how the average price paid for the four different types of Tamworth property have changed…

  • Tamworth Detached Properties have increased in value by 229.3%
  • Tamworth Semi-Detached Properties have increased in value by 252.1%
  • Tamworth Terraced Properties have increased in value by 237.3%
  • Tamworth Apartments have increased in value by 243.2%

It is very much a balancing act of yield, capital growth and void periods when buying in Tamworth. Every landlord’s investment strategy is unique to them. If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord that doesn’t use a letting agent or a landlord that uses one of my competitors – then feel free to contact me and let’s have a chat. What do you have to lose?

https://www.tamworthpropertyblog.co.uk

https://www.facebook.com/Hallandthompsonestateagents/

http://www.hallandthompson.co.uk

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

https://twitter.com/hallandthompson