Comment on the Walsall property market
Ding, Ding!! Seconds out – Round 8! George Osborne today delivered his 8th Budget Statement as Chancellor of the Exchequer. Many consider the number 8 the luckiest of all numbers, and in Chinese culture it is favoured by business due to its association with prosperity, wealth and success. Although, in boxing terms, not many fighters predict a knock out in round 8. So, has Mr Osborne finally delivered the sucker punch to Walsall landlords?!
One of my out of Town property landlords called me as he was coming to visit his family and friends towards the end of the month during the Easter break. He was born and brought up in Walsall and went to the Alumwell Business and Enterprise College which, as he recalls, used to be called the Alumwell Secondary School (way before my time of course!!).
To enhance his retirement, he has a small portfolio of four properties in the Walsall and surrounding area and wanted my advice on where to purchase his next buy to let property. As a University lecturer he lives in a college-owned flat and would never dream of buying where he lives in Kensington where the average value of a flat is £1.62m and a house averages out at £4.1m.
One of my Walsall Wood landlords rang me last week after he had been speaking to a friend of his over a Costa (as you do!!). They were discussing the Walsall property market and neither of them could make their mind up if it was time to either sell or buy property. If you read the newspapers and the landlord forums on the internet, there is a good helping of ‘doom and gloom’, especially with changes in the taxation towards landlords, new legislation on checking tenants and the general uncertainty in the world economic situation (see last week’s article at https://walsallpropertyblog.com/2016/03/01/walsall-landlords-could-be-fined-1188000/) .
OMG (Oh My Gosh/ God for the old school peeps), said one of our tenants signing up last Saturday!! This is when they saw the load of paperwork they had to sign. Gone are the days when you could just ask for a word of mouth referral, collect a copy of a Tenancy Agreement from the local WH Smith and Bob’s your tenant (or is it??).
Amongst the hoard of documents I had were the Right to Rent Guide, copy of the Energy Performance Certificate, a current Gas Cert, an Electric Report, a Schedule of Conditions and Inventory, Prescribed Information and Terms & Conditions of the deposit scheme where the deposit was registered/ kept plus a few other bits…so the sharp intake of breath was understandable.
“What does the ideal Walsall tenant look like?”, asked one of my landlords from Brownhills the other day, to which he carried on before I could reply, “Let me guess, a professional couple, both in their 30’s, flawlessly tidy, pays their rent early, doesn’t complain or fuss, with no plans to move any time soon and cheerfully accepts annual rent rises”.
Before I can answer that question properly, I have always believed all a landlord wants, and expects, of their tenants is to pay their rent on time and look after the property as if it were their own. In return, the landlord should provide a property that is warm, clean, and damp free and resolve any maintenance issues quickly and without fuss.
I had the most interesting chat with a mature couple (in their early/mid 50’s) from the Aldridge area the other day, whilst viewing one of our rental properties. The property wasn’t for them, but their son, who wanted a second viewing with his parents to get the parental blessing. Now I know that isn’t the norm, but in this case the parents were going to act as guarantor. We got chatting about the Walsall property market and how they had bought their first property in the town just after they got married in the late 1980’s when they were in their early/mid 20’s.
Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the highlights of that conversation with you today.
It is almost 7 years since Mervyn King, the then Bank of England Governor, slashed UK interest rates to the unparalleled figure of 0.5% – 5th March 2009 to be precise! In just under five months, starting on 8th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch and there it has stayed since.
In the Summer of 2015, people were predicting a rise in the New Year, yet now, some forecast it may stay at this level for years yet to come with the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Walsall, so I cannot profess to know what will happen to interest rates. However, what I do know, speaking to my Walsall friends and Walsall landlords is that these low interest rates have hit savers really hard.
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….
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.
In Walsall, I am speaking to more and more landlords, be they seasoned professional landlords or FTL’s (first time landlords), as they read reports that the Walsall rental market is doing reasonably well, with rents and property values rising. Interestingly, one landlord recently asked how much he should be paying per square foot (more of that in a second).
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