I just love the salad bar at Harvester. So when I heard my stomach rumbling at an according time I obeyed it and headed straight to the Harvester in Walsall on the A34 to Birmingham. As I entered I was approached by someone who I didn’t recognise. He turned out to be a local solicitor who subscribes to my Blog and said he was an avid reader. He had a few questions and wanted to talk about property investments as he had a small portfolio and was curious to pick my thoughts. He asked me my prediction on the Walsall Property Market for the next five years. So, we had lunch at my favourite salad bar and discussed my favourite subject – the Walsall Property Market. What a result!!
Property prices are both a British national obsession and a key driver of the British consumer economy. So what will happen next for the Walsall Property Market? Here’s what I told him….
Before I can predict what will happen over the next five years to Walsall house prices, I need to look at what’s happened over the last five years.
One of the key drivers of the housing market and property values is unemployment (or lack of it), as that drives confidence and wage growth. These are key factors to whether people buy their first house, existing homeowners move up the property ladder and even buy-to-let landlords have an appetite to continue purchasing property.
The estimated population of Walsall is considered to be around 269,323. When the Tory’s came to power in May 2010, the total number of people who were unemployed in the Town stood at 13,800 or 5.12% of the working age (16-74 year olds).
Last month, this had dropped to 8,800 people, or 3.26% of the working age population.
As the Walsall employment market has improved with better job prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS).
That is why, even with the turbulence of the last few years, property values in the area are 16.15% higher today than they were five years ago. Many home occupiers have held back moving house over the past seven to eight years following the Credit Crunch but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand, as well as putting more housing stock onto the market.
With a more stable economy, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Walsall.
I forecast that the value of the average home in Walsall will increase by more than 27% by 2021.
27% might sound optimistic to some, but according to Land Registry, values are currently rising in Walsall at 5.5% year-on-year. I believe my forecast to be fair, reasonable, and a reflection of both positive (and negative) aspects of the local property market and the wider UK economy as a whole.
However, it wouldn’t be correct not to also highlight those potential negative issues as I do have some slight concerns about the future of our local housing market. The number of properties for sale in Walsall is lower than it was five years ago, restricting choice for buyers – yet, on the flip side of the same coin, is that this keeps house prices higher.
Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy-to-let taxation rules which are being introduced between 2017 and 2021 – although choosing the right sort of property/portfolio mix in Walsal will, I believe, mitigate those issues with the next buy-to-let taxation rules.
I am telling the Walsall property landlords I speak to, that with interest rates at their current level of 0.5% the cash in their Building Society Passbook is going to grow so slowly that it might as well be kept under the bed. By contrast, property prices in Walsall have rocketed over the years – even after the property crashes, far outstripping bank accounts and inflation.
So my final thoughts…property is a long-term investment, it has its up and downs, but it has always outperformed, in the long-term, against most forms of investments. Those in their 40’s and 50’s would be mad not to include property in their long-term financial calculations.
Make sure you buy the right Walsall investment property, at the right price, in the right location.
As you know, I love to talk property (and eat good food) so, whether you are a private landlord with a single unit or a portfolio landlord with several properties…feel free to drop me an email, phone call or even better, pop in to see me. I have a great selection of tea and can make a mean Massala type for the more discerning palate….
Phone: 01922 311016