Rents in Walsall Increase!!

Rents in Walsall Increase!!
Rents in Walsall Increase!!

I was reading the Sunday newspapers last weekend whilst drinking my favourite concoction of freshly juiced Apple & Mango juice, when I spotted an article in the financial pages.  It was announced that UK inflation had increased to its highest level in a year.  Inflation, as calculated by the Government’s Consumer Prices Index, rose by 0.3% over the last 12 months.  The report said it had risen to those ‘heady’ levels by smaller falls in supermarket and petrol prices than a year ago.  If you recall, in early 2015, we had deflation where prices were dropping!

So what does this mean for the Walsall property market … especially the tenants?

Back in November, the Office of National Statistics stated average wages only rose by 1.8% year on year, so when adjusted for inflation, Walsall people are 1.5% better off – in ‘real’ terms.  Great news for homeowners, as their mortgage rates are at their lowest ever levels and their spending power is increasing, but the news is not so good for tenants.

The average rent that Walsall tenants have to pay for their private rental properties in Walsall  – not housing association or council tenants – rose by 2.1% throughout 2015, eating into most of the growth.  2015 wasn’t a one off either.  In 2014, rents in Walsall rose by 1.1% and salaries only rose by only 0.2%.  However, it’s not all bad news for Walsall tenants, because in 2013 rents rose by 0.8%, and salaries rose by 1.9%.

It must also be noted that the private rents Walsall tenants have had to pay for Walsall property since 2005 are only 14.5% higher, not even keeping up with inflation, which over the same time frame, rose at 27.8%.  Salaries were only 20.7% higher over the same time period.  A lot of figures to digest, I know, but it shows a very important trend.

I obviously speak to lots and lots of tenants who rent and more and more of them tell me that it is their preference to rent.  They feel that the days are gone when owning your own property was a guaranteed path to wealth, affluence and prosperity.  I know I keep going on about Europe, but some of the highest levels of home ownership are in Romania at 96.1%, Hungary at 88.2% and Latvia at 80.9% – none of them European economic dynamos – and even West European countries like Spain at 78.8% and Greece at 74%, and we all know that both of those countries are on their knees, riddled with national debt and massive youth unemployment.

At the other end of the scale, whilst we in the UK stand at 64.8% homeownership, in Europe’s powerhouses, only 52.5% of Germans own a home and only 44.1% of Swiss people are homeowners.

Looks like eating chocolate, sauerkraut, renting and good economic performance go hand in hand!  Yet, joking aside, home ownership has not always been the rule in the UK.  In 1918, only 23% of people were homeowners, with no council housing, meaning in fact, 77% were private tenants.

Tenants have choice, flexibility to move, they don’t have massive bills when the boiler blows up!  Walsall rents are growing, but not as much as incomes.  To buy or not to buy is an enormously difficult decision.  For whilst, buying a Walsall home may be an objective for the majority of the 20 to 30 year olds, it might not leave them better off in the long run and it isn’t necessarily the best option for everyone.  That is why, in my humble opinion, demand for renting is only going in one direction – upwards.

I am always happy to hear from landlords whether they are with me or not.  If you want my opinion in general or specifically on a buy to let property then just send me the Zoopla/ Rightmove link.

Email: info@ashmorelettings.co.uk

Phone: 01922 311016

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