Oddly, for some reason, as a 5 year old back in 1981, I remember some things quiet vividly and others not so much thankfully! I can remember there was a lot of snow and black ice everywhere which had me and my father playing games such as taking a running slide to see who can ski the furthest! In other parts of the living world I was happily oblivious to the fact that; Mrs. T was in power, we had a Royal Wedding, England won the Ashes, Walsall FC were managed by Alan Buckley and Bucks Fizz won Eurovision!!
So what has happened to property prices since then I thought? How have things transformed? The number of homeowners and property investors who wished they had in hindsight, purchased up every house in Walsall all those years ago, particularly when you consider what has happened to Walsall property prices since…
…Walsall Property Values since 1981 have risen by 646%!
So how good, bad or indifferent is this? Well, when you consider inflation over the same time period has been 140.9%, meaning in real terms, property values in Walsall are 505.1% higher. So it doesn’t come as a shocking surprise that people can’t afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the Walsall Property market runs much deeper than property value changes as no one had the crystal ball to predict how the property market would have changed in Walsall over the coming 36 years.
Looking at the Local Authority data for the Walsall Metropolitan Borough in 1981 the numbers tell us the following:
34.1% of Walsall people resided in a Socially Rented House, whereas today its 21.2% … a massive drop which can mostly be credited to Margaret Thatcher allowing Council tenants the right to buy their Council House. As you would expect the landscape of the Private Rented Sector has also changed. The proportion of properties privately rented in the Walsall area has doubled, rising from 7.9% to 16.2%.
So, what about the owner occupiers? Surely that has had a substantial drop? In 1981, the proportion of people who lived in the Walsall Council area who owned their own home was 59.9%…and today it’s…62.7%. Not the earth shattering change most of you were expecting – including me!
Home ownership in the 1980’s and 1990’s in Walsall did in fact rise, but as I have mentioned in previous articles in the ‘Walsall Property Blog’, that was because nearly every Council tenant was purchasing their council house. This has constrained the current Council housing stock as they have been sold over the years reducing the numbers significantly. As a direct result of the right to buy scheme there are now hardly any Council houses for the younger generation to move into. So they have no choice but to privately rent.
This is why the buy-to-let market in Walsall is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year like they were in the 1950’s/60’s and 70’s. The Walsall property market is constantly changing and buy-to-let for too long has been heavily dependent on house price growth, where yield has been almost forgotten.
I see the changes in tax, landlord and tenant law in a different perspective to the ‘palm-readers’ and see it as bringing many opportunities where yield will become more important. You might need to change your buy-to-let targets, your methodology to financing or even consider places other than Walsall in which to invest your money, but 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 landlords, and also to you my blog reading friends is this; these changes will make some 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 informed Walsall buy-to-let landlords to thrive in.
Whether you are a client of mine or not I love to talk property with anyone who wishes to engage (much to the annoyance of my wife!). Don’t be shy to pick up the phone…I’m only a call away.
Phone: 01922 311016