Here’s a post that you may have to read a couple of times to get the gist!
Some landlords have been speaking to me recently about stories in the press and their concerns about booming house prices and the next housing bubble. Whether you are an established landlord or one considering entering the market for the first time, it is of utmost importance that you do your homework. Buying a property in Walsall and the surrounding area is an investment, and as such, one needs to do one’s homework.
I am often asked to give my opinion to existing landlords of mine, and even landlords with other agencies. I do not charge for this, as it is only my opinion, and you cannot charge for opinions, can you! Anyway, in a nutshell, Walsall landlords can either go for low risk, low yield but decent capital growth, whilst others invest for high monthly yields, high risk but which has a tendency for lower capital growth.
If you are going to be buying soon in Walsall, it is vital to look to ensure you build in some capital growth by getting a property at a discount or by finding a way to add value. Securing capital growth is going to be tough over the coming years, but don’t lose out if it’s not bargain of the year. Prices would need to rise by 25% to get back to 2007 levels. That figure might surprise a lot of people, but let me explain.
Yes, in Walsall we are only, on average, 7% below the actual values that were being achieved during the boom of autumn 2007, however, this doesn’t take into account inflation. Since 2007, inflation has risen over those six and a half years by around 19%. So in reality, prices would need to be 26% higher today to be at the same ‘real’ level than they were in 2007 (26% is made up of: 19% inflation plus the 7% growth required to return to 2007 figures).
Some forecasters estimate that properties bought in 2007 at the height of the market, will take until 2020 or even 2025 to recover (when you include the impact of inflation). Many landlords will need to take a serious look at any existing property or new ones to make sure they can achieve capital growth, if that’s what they desire, and that this increases in line with inflation. My answer to landlords, get the best advice and opinion you can. Speak to me, speak to others, do your homework and drive a hard bargain when buying, thus ensuring when prices do start to rise again, you are in pole position to reap the benefits.
If you do want my opinion on any aspect of property please feel free to contact me.
Phone: 0345 257 9850/ 01922 637672