If I were a buy to let Landlord in Locks Heath 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 Locks Heath property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Locks Heath property prices do drop, the downside to that is that first time buyers could be attracted back into the Locks Heath property market; meaning less demand for renting (meaning rents will go down).  Yet, before we all run for the hills, all these things could be serendipitous to every Locks Heath Landlord, almost a blessing in disguise.

Locks Heath has a population of 44,109, so when I looked at the number of people who lived in private rented accommodation, the numbers surprised me…

Yields will rise if Locks Heath property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost.  If property values were to level off or come down that could help Locks Heath Landlords add to their portfolio.  Rental demand in Locks Heath is expected to stay solid and may even see an improvement if uncertainty is prolonged. However, there is something even more important that Locks Heath Landlords should be aware of: the change in the human nature of these 20 something potential first time buyers.

I have recently come back from a family get together.  I got chatting with my step mother’s niece and her partner.  Both are in their mid/late twenties, both have decent jobs and they rent.  Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property.  I asked why they weren’t planning to buy?  The answers surprised me as a 30 something, and it will you.  Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets.  They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs.  Most of their friends feel the same.  I was quite taken aback that buying a house is just not top of the list for these youngsters anymore.

So, as 11.7% of Locks Heath people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Locks Heath – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids?  Because at least with property it is something you can touch – there is nothing like bricks and mortar!

For more views and opinions on the Locks Heath Property Market – visit The Locks Heath Property Blog.

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a Tenant?  In retirement, selling up could make financial sense to the mature generation in Locks Heath, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let Landlords of Locks Heath.

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Locks Heath at age 65 (years) is 19.2 years for males and 21.5 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Locks Heath.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Locks Heath?  Of the 5,518 households in Locks Heath, whose head of the household is 65 or over, not surprisingly 4,855 of households were owned (87.98%) and 461 (8.35%) were in social housing.  However, the figure that fascinated me was the 103 (1.87%) households that were in privately rented properties.

More and more Locks Heath OAP’s are selling their large Locks Heath homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Locks Heath OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Some Landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care home fees.

Locks Heath Landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful Tenant who, if the property offers everything a mature Tenant wants and needs, will pay top dollar in rent!

“How much would it cost to buy all the properties in Locks Heath?”

This fascinating question was posed by the 11-year-old son of one of my Locks Heath Landlords when they both popped into my offices before the Christmas break (doesn’t that seem forever ago now!).  I thought to myself, that over the Christmas break, I would sit down and calculate what the total value of all the properties in Locks Heath are worth… and just for fun, work out how much they have gone up in value since his son was born back in the autumn of 2005.

In the last 11 years, since the autumn of 2005, the total value of Locks Heath property has increased by 50% or £2.15 billion to a total of £6.45 billion.  Interesting, when you consider the FTSE100 has only risen by 30.78% and inflation (i.e. the UK Retail Price Index) rose by 37% during the same 11 years.

When I delved deeper into the numbers, the average price currently being paid by Locks Heath households stands at £337.839.… but you know me, I wasn’t going to stop there, so I split the property market down into individual property types in Locks Heath; the average numbers come out like this:

It got even more fascinating when I multiplied the total number of each type of property by the average value.  As detached houses are so expensive, when you compare them with the much cheaper terraced/town houses and apartments, you can quite clearly see how valuable detached properties are in terms of total pound note value, when compared to the value of the terraced/town houses and apartments.

So, what does this all mean for Locks Heath?  Well as we enter the uncharted waters of 2017 and beyond, even though property values are already declining in certain parts of the previously over cooked Central London property market, the outlook in Locks Heath remains relatively good as over the last five years, the local property market was a lot more sensible than central London’s.

Locks Heath house values will remain resilient for several reasons.  Firstly, demand for rental property remains strong with continued immigration and population growth.  Secondly, with 0.25% interest rates, borrowing has never been so cheap and finally the simple lack of new house building in Locks Heath not keeping up with current demand, let alone eating into years and years of under investment means only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Locks Heath has always, and will always, ride out the storm.

In the coming weeks, I will look in greater detail at my thoughts for the 2017 Locks Heath Property Market. As always, all my articles can be found at the The Locks Heath Property Blog