I find myself in a reflective mood today as I want to talk about the future of investing in property in Walsall. Especially since my last article (which was a little gloomy) and the fast changing dynamics in recent times of the Private Rented Sector (PRS).
The truth is that we have got lethargic, with many property investment people having mistaken the ever-rising Walsall property market since the 1960’s as the eternal gift that kept giving as property prices constantly rose and doubled every five to seven years.
The days of making easy money from any old property investment in Walsall are over.
Whilst George Osborne has decided now is the time to milk the ‘Golden Cow’ of the UK’s private property landlords, with changes in taxation for buy-to-let property, many pundits are predicting the end of the PRS as we know it. However, I am inclined to think differently. As an experienced Property Manager in Walsall, I believe it is still possible to make a reasonable, profitable, and safe return on property investment despite these changes.
Any investor will tell you that you need to approach investments with a plan. I can’t remember who said it but somebody famous said in a book I read years ago..”those who fail to plan, plan to fail”. You need to study the property market, take advice and opinions from many expert property industry people, and then decide the PLAN. A good plan always covers multiple risks for all considered eventualities i.e. what if interest rates go up or what if the value of my property drops?
Private rented sector tenants will always want a roof over their head and I don’t see the HM Government building the millions of houses required to house them. Nobody could have predicted how the property market has changed in Walsall over the last couple of decades. Looking specifically at the Walsall Parliamentary Constituency, 20 years ago, 16,878 households (meaning 67.13% of property) were owned and only 364 households were privately rented (meaning 1.44% of property was rented out by private landlords).
Roll the clocks on 20 years and the change has been seismic.
Now only 13,979 of properties in the Constituency are home-owners (a drop to only 55.6% being owner-occupied) and the jump in private renting has been out of this world, as 4,521 properties are now privately rented proportionally 17.98%.
Who would have predicted in 1995 the private rental sector in Walsall would have grown by 1,093.7% in the proceeding 20 years?
Also, if you had asked someone in 1995 to predict what would happen to property values over the proceeding 20 years (i.e. between 1995 and 2015), they might have predicted similar growth to the growth experienced over the previous 20 years (i.e. between 1975 and 1995), which was a very impressive 291.37%.
The Walsall property market is constantly changing and buy-to-let has been heavily dependent solely on house price growth, where yield has been almost forgotten. So you see, I see the changes in tax and landlord and tenant law in a different perspective to the doom-mongers. As an experienced Property Manager and a Letting Agent in Walsall, I see it bringing many positive opportunities.
You might need to change your buy-to-let benchmarks, your approach to financing, or even consider places other than Walsall in which to invest your money, but I hope this will shine a light on investing in properties with healthier yields and create more realistic long term buy-to-let opportunities, instead of short term growth bets and wagers.
The advice I give to my property landlords in Walsall, and to my blog readers, is this – these changes will make some buy to let landlords panic, meaning competition for decent Walsall buy-to-let bargains will reduce as fear of change kicks in and amateur investors flee the market. These opportunities will provide a more stable platform for knowledgeable and wise Walsall buy to let landlords to thrive in.
I cannot stress enough the importance of doing your homework. One source of information and advice is the Walsall Property Blog where I have similar articles to this about the Walsall property market and what I consider to be the best buy to let deals around at any one time in the Town, irrespective of which agent it is on the market with. If you are interested in the local property market in Walsall….you are missing out if you don’t sign up to my blog!
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