I had an interesting meeting with one of my local Walsall landlords this weekend. He wanted some advice around his current existing portfolio which he was looking to expand in a new direction by adding properties that would give him a higher rental yield today. I’ve always advocated having a portfolio of a mixed bag of properties. Looking at his current portfolio I noticed that they consisted of properties with generally a low or average yields so as usual this made me think about the Walsall Property Market. In general a mixed bag of ‘liquorice allsorts’ (in property terms) can ease current cash flow and build you a nice nest egg for the future.
Despite the UK economy heading in the right direction with record low mortgage rates and unemployment figures dropping, the rate of property prices rising in Walsall have tempered. This slow but sure downward trend in the rate of growth has been in evidence since mid 2014. Even so property value increases continue to outpace the growth in salaries, but the gap is closing, helped by a pick-up in salaries over the last 6 months. Property values in the West Midlands region as a whole are 4.6% higher than a year ago. When we compare this to the neighbouring regions of the East Midlands at 6.3% higher and Yorks & The Humber (choice of going north or south!!) at 3.5%, the majority of the country continued to see annual house price gains – even Wales which in the previous year recorded a slight decline of -0.6% was up this year by 1.0%.
Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer over the coming year in 2016 amid heightening activity in the Walsall property market. As I mentioned before in a previous article, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to Walsall property prices. Therefore, I maintain the view that Walsall property prices will rise by at least 5% over 2016 and roughly the same in 2017.
However, property investment is a long term business. Buying the right sort of property is vital. I have recently been speaking with a number of Walsall landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns but quite often offer poor capital verses properties that do go up in value quicker but often offer a lower yield.
So, what types of properties have performed best over the last few years in Walsall, especially in terms of their capital growth? I compared what the average price of detached, semi detached, terraced and flats were selling for back at the start of the Millennium to the present. The results are quite remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 15 years:
Detached Houses in 2000 were selling on average for £107,472 and so far up until October 2015, they have been selling on average in Walsall for £289,353, a rise of 169%
Semi-Detached Houses in 2000 were selling on average for £63,020 and so far up until October 2015, they have been selling on average in Walsall for £125,947, a rise of 100%
Terraced Houses in 2000 were selling on average for £31,918 and so far up until 2015, they have been selling on average in Walsall for £90,438, a rise of 183%
Flats and Apartments in 2000 were selling on average for £34,414 and so far up until October 2015, they have been selling on average in Walsall for £69,667 a rise of 102%
So moving forward, what should new and existing buy to let landlords do with this info? Well, the questions I seem to be asked on an almost daily basis by landlords are:-
“Should I sell my property in Walsall?”
“Is the time right to buy another buy to let property in Walsall and if not Walsall, where?”
“Are there any property bargains out there in Walsall to be had?”
Many other Walsall landlords, who are both with us and many who are with other Walsall letting agents, all of them like to pop in for a coffee, pick up the phone or email us to discuss the Walsall property market, how Walsall compares with its closest rivals; Sandwell, Dudley, Birmingham and Wolverhampton and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion. Look forward to hearing from you.
Phone: 01922 311016