I had an interesting chat with a property landlord the other day about my thoughts on the Walsall Property Market. The subject of the affordability gap between renting property in Walsall against purchasing came up in conversation and how that would affect tenant demand. As a local Property Manager I have noticed how, in recent years, our tenancies are being sustained with tenants staying with us for longer. So my curiosity got the better of me and I just had to take a look at the figures. Here’s what I found…
Everyone wants a roof over their head, and since the Second World War, owning one’s home has been an aspiration of many Brits. However, with rents at record highs in WS postcodes, many are struggling to save enough for a house deposit. Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.
George Osborne announced such schemes as the upcoming Help to Buy ISA, where the Government will top up a first-time-buyer’s deposit and as per previous articles, other schemes to assist first time buyers have been made with indifferent results.
Walsall rented property tenants spend on average just over a third of their salary to have a roof over their head. According to my latest monthly research, the average cost of renting a home in the Town is £594.00 per calendar month.
When the average annual salary of a Walsall worker, in the lower quartile, stands at £20,823 per year, that means the average property tenant in Walsall is paying 34.23% of their salary in rent. I doubt there is much left to save for a deposit towards a house after that which is such a shame for the youngsters of Walsall.
One of the reasons for rents being so high in Walsall is that property prices are high. As I have mentioned before, there is a severe lack of new properties being built. Couple that with earnings in Walsall being one of the lowest in the region (Staffordshire average is £23,943, Sandwell £20,394).
House prices have remained buoyant, even though economically over the last five years, it was one of the worst on record for the country and the West Midlands region as a whole. However, things might not be all doom and gloom as originally thought, as a recent Halifax Survey (their Generation Rent 2015 Survey) suggested more and more people may be long term, if not lifelong, rented property tenants.
In fact, there is evidence in the report to suggest that the perception of how difficult it is to get on the housing ladder is vastly different between parents and people aged 20 to 45. It seems from this survey that the state of the UK economy has shifted priorities significantly in a short space of time.
With fewer people able to save up the deposit required by mortgage lenders, more and more people in Walsall are continuing to rent. Landlords are finding their rented property portfolios are stable, consistent, and profitable. This delay in moving up the property ladder has driven rents across the UK up as more people are seeking rental properties.
This is especially good news for Walsall rented property tenants too, as wages will start to rise and good news for local buy-to-let landlords, especially as property values for most postcodes are now 6.04% higher than a year ago.
If you’d like to discuss the contents of this article in further detail please drop me an email with your contact details or feel free to call. Better still, if you’re in the area then drop in for a cuppa.
Phone: 01922 311016