Do Walsall Landlords ‘Regret’ voting for a Tory government…?!

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Do you still remember that inevitable night of Thursday, 7th May 2015 at 10.05pm….??  With the shocking news that the BBC Exit Polls suggested the Conservatives would be returning into government with a majority.  Well let’s face it…it wasn’t that shocking as a two-horsed race can only be won by one.  The middle classes in Parkhall and Aldridge exhaled a huge sigh of relief, as Walsall landlords, faced with rent controls from Red Ed Milliband and the Labour Party, now had something to cheer about as the Tories were always considered to be a political party that accepted the importance of the rental market, supported its development whist properly targeting the lawbreaker/ slum landlords renting out sub standard rental accommodation.

Since May though, George Osborne announced future rises in stamp duty for buy to let landlords and a change in the interest relief on buy to let mortgages,some people have started to question that loyalty.

Ok, so we can’t hold them entirely responsible for the added regulations of immigration checks (more on that in a future post).  Or the Deregulation Act 2015, whereby you are now required by law to serve certain documents and prove these have been served otherwise, you can forget about bringing about any eviction action against a non-complying tenant…or can we hold them responsible?   However, things could have been a lot worse for Walsall landlords as previous ideas of making landlord’s pay more tax was the idea (which was seriously considered) of increasing Capital Gains Tax rates to the landlord’s own income tax levels.  If Landlords would have had to pay capital gains tax of 40% to 45% on any uplift in value, I can tell you here and now, that would have made investing in property a non starter for almost everyone.

However, I will admit the loss of mortgage higher rate tax relief will make a number of property portfolios not stack up financially.  The new rules are likely to slow demand in the Walsall housing market, which is in fact good news for the other landlords, as there is less competition from ‘amateur’ landlords offering too much for less.

Just a thought, but making Walsall landlords think twice and run their numbers more cautiously is not such a bad thing.

So looking at the numbers, the November figures have just been released and they show a growth of property values in Walsall of 0.3% over the month of November 2015.  That figure doesn’t surprise me due to the time of year.  It’s quite dangerous to look at one month in isolation, so looking at a more medium term view, over the last 12 months; property values in Walsall have risen by 2.71%, not bad when you consider inflation is running at -0.1% (reflected in the recent and long overdue price decrease at the fuel pumps…hooray!!).

However, regular readers of the Walsall Property Blog know my passion for looking deeper into the stats.  The really interesting information is the value growth, but what types of property are actually selling in Walsall?  Looking at all the properties sold, as recorded by the Land Registry, within the Metropolitan Borough of Walsall (this data always runs a couple of months behind the house price data) compared to September 2007 (a couple of months before the credit crunch started to bite and the subsequent property crash).

  Sept 2007 Sept 2015 % Difference
Detached House-Walsall 16 18 +13%
Semi Detached-Walsall 44 31 -30%
Terraced House-Walsall 47 33 -30%
Apartment/ Flats-Walsall 17 7 -59%

 

Now I have mentioned in previous articles that the numbers of properties selling in the town has certainly dropped post 2008, but what amazed me is where the drop in the numbers are!  Whilst the rest of the property types such as semis/ apartments and terraced homes have taken a beating the detached properties have in fact remained in the positive.  Therefore, to ensure we didn’t have a blip, I looked at the sales numbers for the Spring and Summer months of 2015 and the same in 2007… and here is the amazing thing … the numbers hardly change.

 

Less properties are selling than the last decade in Walsall and the types of properties selling have changed ..interesting times ahead for the Walsall Property market!

 

Therefore, all I can say to the landlords of Walsall is do your homework, make sure the numbers do stack up, take advice and opinion from professionals and above all, for those of you planning to add to your portfolio, buy the right property at the right price.

Email: salekm@ashmorelettings.co.uk

Phone: 01922 311016

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