Tamworth’s £72,380,160 “Rentirement” Property Market Time Bomb

Yes, I said ‘rentirement’, not retirement … rentirement and it relates to the 488 (and growing) Tamworth people, who don’t own their own Tamworth home but rent their home, privately from a buy to let landlord and who are currently in their 50’s and early to mid-60’s.

The truth is that these Tamworth people are prospectively soon to retire with little more than their state pension of £155.95 per week, probably with a small private pension of a couple of hundred pounds a month, meaning the average Tamworth retiree can expect to retire on about £200 a week once they retire at 67.

The average rent in Tamworth is £618 a month, so a lot of the retirement “income” will be taken up in rent, meaning the remainder will have to be paid for out their savings or the taxpayer will have to stump up the bill (and with life expectancy currently in the mid to late 80’s, that is quite a big bill …  a total of £72,380,160 over the next 20 years to be paid from the tenant’s savings or the taxpayers coffers to be precise!

You might say it’s not fair for Tamworth tax payers to pick up the bill and that these mature Tamworth renters should start saving thousands of pounds a year now to be able to afford their rent in retirement.  However, in many circumstances, the reason these people are privately renting in the first place is that they were never able to find the money for a mortgage deposit on their home in the first place, or didn’t earn enough to qualify for a mortgage …and now as they approach retirement with hope of a nice council bungalow, that hope is diminishing because of the council house sell off in the 1980’s!

For a change, the Tamworth 30 to 40 somethings will be better off, as their parents are more likely to be homeowners and cascade their equity down the line when their parents pass away.  For example, that is what is happening in Europe where renting is common, the majority of people rent in their 20’s, 30’s and 40’s, but by the time they hit 50’s and 60’s (and retirement), they will invest the money they have inherited from their parents passing away and buy their own home.

So, what does this all mean for buy to let landlords in Tamworth?

Have you noticed how the new homes builders don’t build bungalows anymore … in fact some would said the ‘bungalow storey’ is over.  The waning in the number of bungalows being built has more to do with supply than demand.  The fact is that for new homes builders there is more money in constructing houses than there is in constructing bungalows.  Bungalows are voracious when it comes to land they need as because bungalow has a larger footprint for the same amount of square meterage as a two/three storey house due to the fact they are on one level instead of two or three.

That means, as demand will continue to rise for bungalows supply will remain the same.  We all know what happens when demand outs strips supply … prices (i.e. rents) for bungalows will inevitably go up.

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

Government Legistlation on Tamworth Landlords – Day 7

The  Deregulation Act 2015 – 1 October 2018  which is being debated in parliament could hugely improve the lives of many renters in England.

Latest news on the Homes  (Fitness for Human Habitation and Liability for Housing Standards) Bill 2017-19

The House of Commons voted for the Bill to be sent to a Public Bill Committee, they will scrutinise the Bill  – date to be announced.

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

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

Ask lorraine – My Tamworth tenants may have sub let, what are my responsibilities?

Energy Performance Certificate – How will this effect Tamworth’s Landlords?

In April 2018, residential private properties will need to have a minimum energy performance certificate (EPC) rating of E or it will be illegal to rent them out to tenants. The change from April 2018 will only apply to new tenancies and renewals. For existing tenancies the regulations will not apply until April 2020.

Local authorities will be responsible for enforcing the regulations, whether Tamworth BC have the time or manpower to do this added task,  I hardly think so! The local authorities  will have the power to serve a notice and request that a landlord provides documentation to prove compliance. Landlords who do not comply with these new regulations could find themselves with a hefty £5,000 fine.

Energy Performance Certificate
Energy Performance Certificate

 

 

 

 

 

 

 

 

Properties where the EPC rating is an F or G  are considered substandard  and will either need improvements carried out or will have to cease to be rented out. With only 8 months away to legislation, landlords are reminded to look at implementing improvement works sooner rather than later.

Works need to be cost effective for the landlord and permissible but landlords are at liberty to carry out works to an even higher standard, should they wish. 
As always there are exemptions to the rule –
  • The landlord’s tenant withholds consent for the works.
  • The landlord  was required to obtain a third party’s permission to undertake improvements, and the permission was denied. Or the third party imposed unreasonable conditions.
  • A qualified independent surveyor considers that the works will cause a capital devaluation of the property of more than 5%.

Exemption for listed buildings or buildings in a conservation area has not been made clear but it is hoped, when the  Government publish specific guidance for landlords in October this year, it will  confirm that listed building are exempt from the change. 

As with all Government policies until they are actually published there is no saying what they have deferred and if further exemptions are to be applied. So landlords it is a waiting game but  if you do decide to commence with improvements, it would probably be best not to commit lots of money and big improvements until all has been made clear.

 

Unhappy with your Property Manager? The best time to switch Letting Agents is mid-tenancy. Take us up on our offer and allow us to take care of the switching process. http://www.hallandthompson.co.uk or call Lorraine, Jackie or Jody on 01827 425195.

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

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

https://www.tamworthpropertyblog.co.uk

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

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

192 Tamworth Households Occupied by OAP Renters

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Tamworth, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Tamworth?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Tamworth at age 65 (years) is 18.4 years for males and 20.7 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Tamworth.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Tamworth?  Of the 7,239 households in Tamworth, whose head of the household is 65 or over, not surprisingly 5,236 of households were owned (72.33%) and 1,631 (22.53%) were in social housing.  However, the figure that fascinated me was the 192 (2.65%) households that were in privately rented properties.

Tenure: Owned; Tenure: Shared ownership (part owned and part rented); Tenure: Rented from council (Local Authority Tenure: Private rented; Tenure: Living rent free;
72.33% 0.26% 22.53% 2.65% 2.22%

Anecdotal evidence, by talking to both my team and other Tamworth property professionals is that this figure is rising.  More and more Tamworth OAP’s are selling their large Tamworth homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Tamworth OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.

Tamworth landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

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 give me a call on 07531484956. We can always meet up for a chat and a coffee, we can even walk the dog.

My work experience person.

 

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

 

 

 

 

 

 

 

 

 

 

 

Ask Lorraine – My tenant is refusing me access so that I can do my annual checks. What can I do?

🙋 Landlord’s Question: 

”Dear Lorraine,

My tenant is refusing access so that I can do my annual checks. What can I do to ensure they give me access?”

Lorraine’s Answer:

At this time of year, we often receive calls from landlords about problems they are facing in gaining access to rental properties.

When a landlord lets a property he is agreeing to give the tenant exclusive possession of that property and quiet enjoyment.

Check your tenancy agreement that you have a section which covers right of entry. Without the tenants permission or unless of course there is a real emergency you could be charged with trespass and the tenant could well claim damages against you or your agent. Not a nice thought when you are only trying to do your job!

Access is only permitted in one of two ways – a provision in the tenancy agreement or where the law grants a right of access, for instance, an emergency or to inspect or carry out repairs.
Landlords and agents should always give tenants notice of their impending visit, check your tenancy agreement as to the amount of notice you have to give. If the amount of notice is not stipulated on the tenancy agreement, landlords can use s11, Landlords and Tenant Act 1985 which allows access for repairs as long as landlords or agents give 24 hours notice prior to entering a rented property.

Landlords and agents should always look to give reasonable notice for access, keeping on friendly terms with tenants does help, however if the tenant is being unreasonable and constantly refusing access then the landlord or agent faces a very difficult situation. Speak to the council they may be able to help, after all if the tenant makes a complaint about the disrepair of the property to them, the council are quick to act then. Last and my least favourable option, due to the expense is to seek an injunction in the court to force your access.

It won’t hurt to be a good and friendly landlord, after all a bit of sugar goes a long way.

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.

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