Walsall Property Market Update – After the Holiday & Since the General Election…

Walsall – After the Holiday & Since the General Election
Walsall – After the Holiday & Since the General Election

Back on the Blog after the longest break I’ve had in two years and a record number of weddings attended!!  With schools opening up this week, I don’t know about you, but I’ll be glad to see the back end of the kids.  Whilst away I have received numerous email requests to discuss various topics of interest by my readers.  I picked the one requested most but I promise to try and get around addressing them all over the coming weeks.

Housing has always been the Cinderella issue at General Elections.  Policing, NHS, Education, Tax and Pensions etc., are always headline grabbing stuff and always seem to go to ‘the ball’. However, housing, which affects all our lives, always seems to get left behind and forgotten.

Nonetheless, the way the politicians act on housing can have a fundamental effect on the wellbeing of the UK plc and the nation as a whole.

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As a Walsall landlord is it wise to set up a Limited company?

As a Walsall landlord is it wise to set up a Limited company?
As a Walsall landlord is it wise to set up a Limited company?

A question I get asked all too often is around whether to set up a limited company or not?  I’ve always maintained my expertise is not around tax (as much as it is the Accountant’s job and that’s why I have one..you should do too), but on this platform I can always share my thoughts with you.

In November 2015, George Osborne disclosed plans to restrain the buy to let (BTL) market, implying its growing attractiveness was leaving aspiring first time buyers contesting with landlords for the restricted number of properties on the market.  One of things he brought in was that tax relief on BTL mortgages would be capped, starting in April 2017.  Before April 2017, a private landlord could claim tax relief from their interest on their BTL mortgage at the rate they paid income tax – (i.e. 20% basic /40% higher rate and 45% additional rate).

So, for example, let’s say we have a Walsall landlord, a high rate tax payer who has a BTL investment where the rent is £600 a month and the mortgage is £400 per month.  In the tax year just gone (16/17), assuming no other costs or allowable items …

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Walsall’s humble Semi-Detached house increased by 227% in value

Walsall's humble semi increased in value by 227%
Walsall’s humble semi increased in value by 227%

The humble semi-detached house with its bay windows and net curtains has long been ridiculed as an emblem of safe, lacklustre and desperately uncool suburban life; the homes of the likes of Hyacinth Bucket in ‘Keeping up Appearances’ and more latterly Alan Partridge – but they could have the last laugh – having enjoyed one of the highest price growths of any property type in Walsall, up by an average 227% increase in the last twenty years!

The semi is, of course, still hugely popular on new build developments; although slightly more modern in appearance compared to its older ancestor!

The semi can now laugh in the face of its posher detached counterpart, which saw a rise of only 161% in the same 20-year period. Looking at smaller properties, flats/apartments rose 106%, whilst terraced houses did slightly better at 229% although they were starting from a lower base and demand from buy to let landlords has had a big part in driving up the values on that type of house based upon its rental potential.

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Walsall Babies Cause Walsall Property Shortage!!

Walsall Babies Cause Walsall Property Shortage!!
Walsall Babies Cause Walsall Property Shortage!!

What is the relation to babies being born and the Walsall property shortage I hear you ask!  Well…

….as more babies are being born to Walsall mothers, this increase will continue to add pressure to the already strained Walsall property market – and greatly affect the local property market in the future.

The past eight years of ever incremental increasing birth rates, a significant 3.96 babies were born for every new home that was built in the Walsall area in 2016.

My belief is that it has and will continue to aggravate the Walsall housing shortage. This means demand for housing (be it to buy or rent) has remained high.  The high birth rate has meant Walsall rents and property prices have remained resilient and they will continue to remain high in the years to come – even with the challenges the economy has felt over the last eight years.

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Humongous Change of Walsall’s Shared Households!!

Humongous Change of Walsall’s Shared Households!!
Humongous Change of Walsall’s Shared Households!!

A day in the life of a Property Manager is never dull. One of the joys of my profession is meeting interesting people every day. If I had to choose who I enjoying meeting the most (landlords, tenants, contractors, developers, solicitors, other fellow professionals) then, I would have to say…landlords! The cogs of a landlord have always intrigued me and they can come up with some of the most interesting topics/ thoughts/ questions ever!!

The other day I met with a Walsall landlord who told me that he had been chatting with an architect friend of his who informed him that back in the mid 2000’s, the developments he was asked to draw up were a balance of one and two bed properties, compared to today where the majority of the buildings he is designing are more towards two and sometimes three bedrooms. Now of course, this was all subjective but it made me think if there was any truth in that and how this affected the Walsall property market?

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Walsall Property and the Housing White Paper..Back to the Future Part 2 (2037)!!

Walsall Property and the Housing White Paper..Back to the Future Part 2 (2037)!!
Walsall Property and the Housing White Paper..Back to the Future Part 2 (2037)!!

I had an interesting conversation with a landlord who called me last week.  He manages his own portfolio and seemed well versed with the lettings industry.  He kept himself updated of the constant and fast changing world of housing and all the happenings in the Walsall Property Market.  He said he had been receiving my newsletters for some time now and followed my Blog with interest and wanted to pick my brain on the much awaited housing White Paper.  A summary of my thoughts and discussion with the landlord follows…

In case you didn’t know, a few weeks ago, the Government released a White Paper on housing.  It was interesting to note that the Private Rental Sector (PRS) played a key part in the future plans for housing. This is especially important for our increasing Walsall population.  It follows nicely from the article I wrote last week regarding Walsall property since 1981 where we looked back at what has happened since then.  In today’s article we can marry both the White Paper impact on Walsall’s Property Market, together with projections for the future and how they both tie in.

In 1981, the population of Walsall stood at 255,509…

…and today it stands at 278,902.

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Is the Walsall Buy to Let Market Over-Saturated?

Is the Walsall Buy to Let Market Over-Saturated?
Is the Walsall Buy to Let Market Over-Saturated?

If I were a buy to let landlord in Walsall today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let.

To add insult to injury, Brexit has caused a tempering of the Walsall property market with property prices not increasing by the levels we have seen in the last few years.  There is even a possibility we might even see a very slight drop in property prices this year and, if Walsall property prices do drop, the downside to that is that first time buyers could be attracted back into the Walsall property market; meaning less demand for renting ( ie rents will go down).

Before we all run for the hills, all these things could be serendipitous to every Walsall landlord, almost a blessing in disguise.

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