Walsall landlords!! What are the trends of tenants in Walsall?

This is a subject that I have touched on quite often recently, however, I really do feel it’s a big issue so make no apologies for mentioning it again from another point of view – the landlord’s!

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I was reading a report the other day produced by the Halifax, about the UK property market and why more and more of the younger generation seem to be renting than buying.  I find it fascinating that over the last ten years, the British obsession of buying a house and the fact that if you rented, you were once seen as a second class citizen, has turned on its head to a point where the hopes and dreams to own a nice home will be replaced by the ambition simply to live in one!  In the latter half of the 20th Century, you left school, got a job, bought a small house and kept buying and selling property; constantly upgrading until eventually they carried you out in a box.

However, the perceived stigma of renting has gone and it seems that we are now beginning to accept a lifetime of renting. This is a very important consideration for both Walsall homeowners and Walsall landlords as it will transform the way the Walsall property ladder looks in the future and I might ask whether or not it will exist at all for some people?

The makeup of households is one important factor, especially in the Walsall property market.  The normal stereotypical married couple, two kids and dog of the 1970’s and 80’s has changed.  More and more we have the need for larger houses where two families come together after divorces, sometimes with kids, and need a property to house everyone.

Looking at the data for Walsall, of the 12,621 private rental properties in the Walsall Metropolitan Borough area, 24.32% of those rented properties are one person households (3,069 properties). However, when we compare the number of one person Walsall households who have bought their own property with a mortgage, of the 48,335 owner occupied households in the area, only 3,612 of those properties are a one person household – 7.47%.  Compared to a decade ago, this explosion in demand for decent high quality rental properties that one person households require has not been met with an increase in supply of such properties.

More and more, I believe Walsall landlords need to consider this change in the makeup of Walsall households, as I believe this could be an opportunity.  Another interesting stat that raised an eyebrow was that 12.23% of those 12,621 rental properties (1,543 properties) are lone parent households as well.  Again, another possible opportunity that Walsall landlords might want to consider in their future investment plans.

It is true, the Governments introduction in 2013 of the Help to Buy scheme, where first time buyers only needed a 5% deposit, changed the perception of peoples’ ability to buy, without having to save tens of thousands of pounds for a deposit.  However, it might surprise you, 95% mortgages were re-introduced within six months of the Credit Crunch in late 2009, so again it comes down to people’s own perception.  Many youngsters think they won’t get a mortgage, so don’t even bother trying.  Coming back to the deposit, it is still a fact that once you start renting, it becomes that much harder to save for a deposit, regardless of the size.  Interestingly, 86% of renters polled by the Halifax refuse to sacrifice the quality of accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit.   This is the crux and the real reason why people aren’t buying but renting…and why demand for renting will continue to grow in the future.

Walsall tenants can upgrade the quality and size of the property they live in for a minimal increase in rent.  The average rent of a two bed property in Derby is £505pcm, but a three bed is only £48pcm more at £553pcm, whilst the average four bed rent is £625pcm.  If you had to make that jump when buying, the monthly mortgage payments would be considerably more than that!

Without any social pressure and better quality rental properties compared to a decade ago, we will become a nation of renters within the next generation.  Who is going to supply all these properties to rent?  Landlords of course!

Whether you are an existing landlord looking to grow your portfolio or looking to become a ‘first time landlord’, my thoughts are take advice from as many people as possible.  However, as the majority of landlords buy their buy to let properties in the same town they live, you will need specific advice about Walsall itself.  One place for such advice and opinion is me! Call me NOW!

Tel: 01922 311016

Email: salekm@ashmorelettings.co.uk

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