“Why should Walsall’s pensioners be forced to downsize? A question I received via social media a couple of weeks ago. The mature member of a Walsall society came across my article I wrote at the start of the year (see article HERE), about Walsall pensioners feeling trapped in their homes.
There are around 24,000 home owning OAP’s in Walsall.
After working hard for a life time and buying a home for themselves and their family, the children have flown the nest and now they are left to rattle around in a big house. Many feel trapped in their large homes, hence I dubbed these Walsall home owning mature members of our society, ‘Generation Trapped’.
So, should we force OAP Walsall homeowners to downsize?
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 …
I was having a most interesting chat the other day with a Walsall landlord when we were looking at a property he was thinking of buying. As I am sure you are aware, I am always happy to cast my eye over any potential buy-to-let purchase in Walsall, be that you emailing me a Rightmove/ Zoopla link, a brochure in the post or even treading the carpet and seeing it together. I don’t charge for that, and you don’t even need to be a client of mine.
We got talking about the Walsall Property Market and this landlord brought up the subject of a report he had read that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Walsall.
Well my blog reading friends, some commentators said last winter that buy-to-let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!
Honestly I could write a book about this. Time and time again through my agency career I would have landlords calling me, desperate for advice after they’ve placed a “lovely” tenant in their property using a free (or low cost) DIY advertising website. The tenant presented themselves as honest, open, and above all very capable of paying the rent.
But the truth is a different matter. They got into the property by deception, and ended up costing these landlords thousands of pounds in damages, unpaid rent, and above all…the stress. These landlords had to cover the mortgage whilst funding the legal battle. One made very difficult because they weren’t aware of all the legislation surrounding lettings. This could prejudice their position in court. Didn’t serve the Prescribed Information? Didn’t register the deposit within 30 days? That means the tenant could actually sue you for 3 times the deposit amount! And there’s more…
It has been said that some 30% of the PRS is made up of accidental landlords (Source: Landlordnews.co.uk). Here lies the problem. As an accidental, or amateur (not a bad thing!) landlord, it is unlikely that they invest the time to make themselves aware of all the legislation surrounding lettings. There is a lot, but as the saying goes “you don’t know what you don’t know,” so most are blissfully unaware – until it goes wrong, and they can do with disastrous consequences!
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?
I can’t remember who coined it first but the first time I heard it was when Mrs Thatcher said it…“An Englishman’s home is his castle-and everyone should own their own home”.
In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.
But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Walsall buy to let properties as an investment. Walsall first time buyers were in competition with Walsall landlords to buy these smaller starter homes… pushing house prices up in the 2000’s beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Walsall landlords fanning the flames of the Walsall housing crisis by adding to the bonfire?
I don’t know about you but at some point over the Christmas break I get fed up of all the eating, drinking and partying. “Bah! Humbug!” I hear you say…but in reality I think it’s simply that as a busy business owner, my mind and body can’t take the change in pace from mad and hectic to practically a vegetative like state.
So when I hit that point and I need to re-engage my brain, this is what I plan to do…