April Fools Day was no joke for some Landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% stamp duty George Osborne imposed on buy to let properties after the 31^st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Locks Heath, all of us have noticed, since the clocks went forward, demand to buy in April and May from these Landlords has eased.

Then we have the Brexit issue, which is also having a tempering effect on the Locks Heath property market – although if you recall I wrote about this last week, and whilst an exit will have an effect, it won’t be the end of the world scenario some commentators are suggesting. In another article I wrote previously, I spoke of the growth rate of Locks Heath property values, and whilst the rate of growth is slowing, Locks Heath property values are still 7.7% higher year on year, albeit the growth rate month on month has started to moderate when compared to the heady days of month on month rises of 2014 and 2015. Interestingly though, a very recent members survey of the Royal Institution of Chartered Surveyors states that only 17% of members believed property values would increase over the next Quarter compared to 44% at the end of 2015.

All this had led to increase in the number of properties for sale. For example in the SO31 postcode, which mainly comprises of Locks Heath, Warsash, Hamble and Netley Abbey, there 322 properties for sale in the postcode in December (of which 73 came on to the market for the first time). In January, February and March, 418 properties came onto the market in the postcode district (or an average of 139 per month), meaning by end of the first Quarter, there were 419 properties available for homeowners and landlords alike to buy in SO31 (i.e. a rise of 30.1% more properties for sale). These figures are mirrored in neighbouring postcodes throughout the Locks Heath area.

Nevertheless, I believe this easing of the Locks Heath property market is a good thing, as investment Landlords wont have to pay top dollar to secure a property because of the lower competition. On the face of it, this easing should be bad news for the 33,716 homeowners in the SO31 area, but nothing could be further from the truth. The majority of homeowners that move, move up market, (i.e. from a flat to terrace/town house, then a semi and then detached), so whilst last year you would have achieved a top dollar figure for your property, you would would have had to have paid an even higher top dollar to secure the one you wanted to buy. The Swings and Roundabouts of the Locks Heath Property Market!

However, all the signals suggest that whatever the aftermath of the approaching EU referendum, in the long term, the disparity between demand for Locks Heath property and the supply (i.e. the number of actual properties) will still exercise a sturdy and definitive influence on the Locks Heath property market. It wouldn’t surprise me that if by 2021, whichever way we vote in late June, assuming we don’t have another credit crunch or issues like a major world conflict, property prices will be between 20% to 23% higher than they are today.

If you want to read more articles on the Locks Heath property market, whether you are a Locks Heath landlord, Locks Heath homeowner, first time landlord or a first time buyer – then visit the Locks Heath Property Blog HERE.

If you read all the newspapers, the Brexit debate seems to be focused solely on central London. Many commentators have said Brexit would mean central London would have a lower standing in the world, meaning less people would be employed in Central London, with the implication of lower wages, fewer jobs etc., in Central London.  But we are in Locks Heath, not Marylebone, Mayfair or any part of Zone 1 London.

We are in Locks Heath and central London is 82 miles away, and whilst the central London property market exploded after 2009, that explosion really and honestly didn’t affect the Locks Heath property market. So, putting central London aside, what would an ‘in’ or ‘out’ vote really mean for the 13,800 property owners of Locks Heath and Fareham?

Initially, over the coming months, on the run up to referendum, I believe it will be like the run up to last year’s General Election. With the short-term uncertainty in the country, quite often, big decisions are put on ice and people are less likely to make big money purchases i.e. buy a property. However, in the four months up to last year’s Election, property values in Locks Heath increased by 1.73%, not bad for a country that thought it would get a hung parliament! So that argument doesn’t hold much weight with me.

Post vote, should the UK opt to leave Brussels, there would be a much more noteworthy impact. I believe that a vote to stay in the EU would see the Locks Heath property market return to a status quo very quickly, but the contrasting result could lead to some changes. The principal menace to the Locks Heath (and UK) housing market could be variation (in an upwards direction) in interest rates as a result of a Brexit, which could theoretically see the cost of mortgages grow swiftly, pricing many out of the market … but then two thirds of landlords buy without a mortgage, so that won’t affect them.

So in reality, if I really knew what will happen, I would be a City Whiz Kid in London earning millions, not a Letting Agent in Locks Heath. However, I suspect whatever decision the electorate of Locks Heath and the country as a whole makes, over the long term it won’t have a major effect on the Locks Heath property market. We have seen off ‘the end of the world’ credit crunch of 2008/9 and subsequent property crash, the 1988 Nigel Lawson induced post dual-MIRAS property crash, the 1979 Winter of Discontent property crash, the 1974 oil crisis that stimulated another property crash. We can even go back nearly a century with the 1926 post General Strike slump in property prices.

Today, property prices are 236.62% higher than 21 years ago in Locks Heath and are 7.7% higher than 12 months ago. So, make your own decision on 23^rd of June 2016 safe in knowledge that whatever the result, there might be some short term volatility in the Locks Heath property market, but in the long term (and property investment is a long term strategy) there aren’t enough houses in Locks Heath to live in either to buy or rent. And until the Government allow more properties to be built, the Locks Heath property market will be just fine. Even if it has a little blip in the summer, there could be some property bargains on the run up to Christmas to be had!

For more advice and opinion on the Locks Heath property market, even where those buy to let bargains could be found now visit the Locks Heath Property Blog HERE.

I was reading the Sunday Papers and, when reading the financial pages, it was announced UK inflation had increased to its highest level in a year. Inflation, as calculated by the Government’s Consumer Prices Index, rose by 0.3% over the last 12 months.  The report said it had risen to those ‘heady’ levels by smaller falls in supermarket and petrol prices than a year ago. If you recall, in early 2015, we had deflation where prices were dropping!

So what does this mean for the Locks Heath property market… especially the Tenants?

Back in November, the Office of National Statistics stated average wages only rose by 1.8% year on year, so when adjusted for inflation, Locks Heath people are 1.5% better off in ‘real’ terms.   Great news for homeowners, as their mortgage rates are at their lowest ever levels and their spending power is increasing, but the news is not so good for Tenants.

The average rent that Locks Heath Tenants have to pay for their Private Rental Properties in Locks Heath (i.e. not housing association or council tenants) rose by 2.9% throughout 2015, eating into most of the growth.  2015 wasn’t a one off either.  In 2014, rents in Locks Heath rose by 2.2% (where salaries only rose by only 0.2%) However, it’s not all bad news for Locks Heath Tenants, because in 2013 rents rose by 1.8%, (but salaries rose by 2.2%).

It must also be noted that the private rents Locks Heath Tenants have had to pay for Locks Heath property since 2005 are only 20.0% higher, not even keeping up with inflation, which over the same time frame, rose at 27.8% (although salaries were only 22.3% higher over the same time period).

More and more, talking to ’20 and 30 somethings’ who rent – it is a choice.  Gone are the days where owning your own property was a guaranteed path to wealth, affluence and prosperity.    I know I keep mentioning Europe, but some of the highest levels of home ownership are in Romania at 96.1%, Hungary at 88.2% and Latvia at 80.9% (none of them European economic dynamos) and even West European countries like Spain at 78.8% and Greece at 74% (and we know both of those countries are on their knees, riddled with national debt and massive youth unemployment).

At the other end of the scale, whilst we in the UK stand at 64.8% home ownership, in Europe’s powerhouses, only 52.5% of Germans own a home and only 44% of Swiss people are homeowners.  Looks like eating chocolate, sauerkraut, renting and good economic performance go hand in hand!  Yet, joking aside, home ownership has not always been the rule in the UK.   In 1918, only 23% of people were homeowners, with no council housing, meaning in fact, 77% were tenants.

Tenants have choice, flexibility to move, they don’t have massive bills when the boiler blows up, it’s a choice.  Locks Heath rents are growing, but not as much as incomes. To buy or not to buy is an enormously difficult decision.  For while buying a Locks Heath home is a dream for the majority of the 20 and 30 something’s of Locks Heath have, it might not leave them better off in the long run and it isn’t necessarily the best option for everyone.  That is why, demand for renting is only going in one direction – upwards.

If you want to read more articles on the Locks Heath property market, whether you are a Locks Heath landlord, Locks Heath homeowner, first time landlord or a first time buyer – then visit the Locks Heath Property Blog HERE.

I occasionally like a drink in the Talisman in Park Gate and whilst I was in there recently a gentleman approached me and asked if I was the person who wrote the blog about the Locks Heath property market. We ended up having an interesting chat about the local property market, as he was concerned his daughter would never be able to buy her own property, a place in Locks Heath she herself can call home.

My latest analysis, using the Land Registry and Office of National Statistics, shows that overall, month on month, Locks Heath property values increased by 1%. The year on year figures showed the value of residential property in Locks Heath has increased by 7.7% in the year to the end February 2016, taking the average value of a property in the council area to £254,100.

It gets even more interesting when we look at the last few months’ figures and see the patterns that seem to be emerging.

• January 2016 – a rise of 0.4%
• December 2015 – a rise of 0.9%
• November 2015 – a rise of 0.7%

We have talked in many recent articles about the lack of properties being built in Locks Heath over the last 30 years. This lack of new building has been the biggest factor that has contributed to Locks Heath property values still being 236.62% higher than in 1995. At the risk of repeating myself, until the Government addresses this issue, and allows more properties to be built, things will continue to get worse as the UK population grows at just under 500,000 people a year (which is a combination of around 226,000 people because of higher birth rates/people living longer and 259,000 net migration) whilst the country is only building 152,400 properties a year – no wonder demand is outstripping supply.

Another reason intensifying the current level of property values in Locks Heath, is the fact that people aren’t moving home as much as they used to, meaning fewer properties are coming onto the market for sale, so in consequence, there is a lack of choice of property to buy, meaning people thinking of moving are discouraged from putting their property on the market … thus perpetuating the problem, as the scarcity of possible properties to buy in order to move also deters people from offering their home for sale. This unevenness between demand from would-be purchasers and the number of properties coming on to the market for sale is causing pressures in Locks Heath (and the rest of the UK).

So what of the future of the Locks Heath property market and this man’s daughter? I firmly believe the property market in Locks Heath and the country as a whole is changing its attitude about home-ownership. Back in the 1960’s, 70’s, 80’s and 90’s, getting on the property ladder was everything. Since the late 1990’s, we as a country (in particular, the young) have slowly started to change our attitude to home-ownership. We are moving to a more European model, where people choose to rent in their 20’s and 30’s (meaning they can move freely and not be tied to a property), then inherit money in their 50’s when their property owning parents pass away, allowing them to buy property themselves … just like they do in Germany and other sophisticated and mature European counties, meaning his daughter will end up owning property, just later in life than we did. So, whatever the vote on the 23rd of June, if you think about it, we might be more European than we think!

If you want to read more articles on the Locks Heath property market, whether you are a Locks Heath landlord, Locks Heath homeowner, first time landlord or a first time buyer – then visit the Locks Heath Property Blog HERE.

Renting used to be a dirty word in the 60’s and 70’s. You either lived in a ‘Rigsby Rising Damp’ style bedsit with wood chip on the wall and a coin operated electric meter or you lived in a council house. In the latter part of the 20^th Century, the British were persuaded that rent payments were ‘wasted money’. However, owning often makes less financial sense than renting and as the rate of home-ownership is starting to drop substantially, as we roll the clock forward to today, there is no stigma at all to renting – everyone is doing it. In fact, of the 41,605 residents of Fareham, 8,789 of you rent your house from either the local authority/social provider (ie council house or housing association) or private Landlords – meaning 21.12% of Fareham people are Tenants.

The idea of home ownership is deeply embedded in the British soul, in fact 32,323 Fareham people live in an owner occupied property (or 77.69%). Housing is at the heart of Government policy, as George Osborne has promised 200,000 new properties a year so first time buyers can buy their first home whilst recently changing the tax laws for buy to let Landlords. To get votes, Thatcher (and everyone since) ran election campaigns promising everybody their own home, and as a country, we seem to equate home-ownership the goal of British life. 

So as more and more people are renting nowadays, are we turning to a more European way of living? Well, I believe, as a country, we are. In fact, home-ownership could be affecting your health! The UK, according to Bloomberg, is only the 21^st healthiest country in the world. Germany is at No.10 and Switzerland at No.4 and home-ownership is at 52.5% and 44% respectively in those countries (in the UK it is 64.8%).

In the Fareham Borough Council area, 73.32% of homeowners who own their house outright said they were in ‘very good’ or ‘good’ health whilst, at the other end of the scale, 6.03% said their health was ‘bad’ or ‘very bad’. Looking at renting, the census splits tenants into two types – 72.91% of Fareham local authority/social Tenants said they were in ‘very good’ or ‘good’ health and 9.01% were in ‘bad’ or ‘very bad’ health …

… whilst ‘private rented tenants’ in Fareham, were the healthiest, as 89.09% of them described themselves in ‘very good’ or ‘good’ health and only 2.82% were in ‘bad’ or ‘very bad’ health. 

I am not suggesting that low home-ownership rates in Switzerland and Germany are directly linked to health, nor, do I expect Brits to all go to Berlin, Interlaken or Düsseldorf and realise how happy people are when they don’t need to worry about all the stresses which accompany home-ownership. The numbers for Fareham do go some way to back up the argument (and they are the same across the whole of the UK). Nonetheless I do think that substantially all of the upside to homeownership in recent years has been a function of monumental rising house prices. Now that’s come to an end, it’s hard to see why anybody would want to buy?

Renting is here to stay in Locks Heath and it’s growing incrementally each year. Even with the new tax rules for Landlords, buy to let is still a viable investment option for most people in the suburb. There has never been a better time to buy buy-to-let property in Locks Heath, but buy wisely. Gone are the days that you would make profit on anything with four walls and a roof. Take advice, take opinion, do your homework. One place to do more homework, to read more articles on the Locks Heath property market like this, is the Locks Heath Property Blog www.thelocksheathpropertyblog.co.uk.

The ‘Right to Buy’ scheme was a policy introduced by Maggie Thatcher in 1980 which gave secure council tenants the legal right to buy the Council home they were living in with huge discounts. The heyday of Council ‘Right To Buys’ was in the 80’s and 90’s, when 1,719,368 homes in the country were sold in this manner between October 1980 and April 1998. However, in 1997, Tony Blair reduced the discount available to Tenants of council houses and the numbers of properties being bought under the Right to Buy declined.

So what does this mean for Locks Heath homeowners and Landlords? Well quite a lot actually!

Looking at the figures for our local authority, whilst the number of ‘Right to Buys’ have dwindled over the last few years to an average of only 29 ‘Right to Buy’ sales per year, one must look further back in time. Looking at the overall figures, 2,049 Council properties were bought by council Tenants in the Fareham Borough Council area between 1980 and 1998. Big numbers by any measure and even more important to the whole Locks Heath property market (i.e. every Locks Heath homeowner, Locks Heath Landlord and even Locks Heath aspiring first time buyers) when you consider these 2,049 properties make up a colossal 14.8% of all the privately owned properties in our area (because in the local authority area, there are only 13,808 privately owned properties).

Locks Heath first time buyers and Landlords can now buy these ex-council properties second hand (or the PC brigade like to call them ‘pre-loved ex–local authority dwellings’) as those original 80’s and 90’s Tenants (now homeowners) have more than passed the time of any claw back of the discount they received (council discount was repayable if the first owner sold within a stipulated time period – usually 5 years).

Now let us all be honest, some (not all), but some ex-council properties lack the vital KSA (Kerb-Side-Appeal) that some Landlords crave. The new homes builders know all about KSA as they dress up the exteriors of their new homes to make them more appealing to buyers.

Yes, the modern stuff being built in Locks Heath is lovely, but too many Landlords purchase buy to let property solely based on where they would choose to live themselves, instead of choosing with a business head and choosing where a tenant would want to live.  As I have mentioned in a previous article, a property attractive to you as a purchaser is likely to be attractive to a potential Tenant but you should always remember the first rule of buy to let property – you aren’t going to live in the property yourself. What an ex-council property lacks in terms of KSA, they more than make up for in other ways. Tenants more worried about how close the property is to a particular school or family members for child care matter to them far more than the look of a property.

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, that is more than made up for in the much higher yields – and those built between the wars or just after are really well built. Tenant demand for such properties is good since Locks Heath property values are so expensive. A lot of people can’t get mortgages to buy, so they will settle on renting, meaning there is a good demand for that sort of property to rent. Also, the very fact the council were forced to sell these Locks Heath properties in the 80’s and 90’s, means that today’s younger generation who would have normally got a council house to live in themselves, now can’t as many were sold ten or twenty years ago.

So to Locks Heath Landlords I say this… don’t dismiss ex-council houses and apartments – but remember the first rule of buy to let (see above). However, those very same Locks Heath Landlords should go in with their eyes open and take lots of advice. Not all ex-council properties are the same and even though they have good demand and high yields, they can also give you other headaches and issues when it comes to the running of the rental property. One source of advice is the Locks Heath Property Blog http://www.thelocksheathpropertyblog.co.uk

… That just leaves the 1,186 council houses still owned by the local authority to be sold to their tenants in the coming years!

My parents bought their first house in the late 1970’s, they were in their late 20’s. Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s the average age people bought their first house was 23. By the early 1970s, it had reached 27, rising to 28 in the early 1980’s.

This year alone, 464 people in Locks Heath, Warsash and Whiteley areas will turn 28 and 463 in 2017… and dare I say 393 in 2018… year in year out the conveyor belt carries on… where are the Locks Heath youngsters going to live?

Ask a Locks Heath ‘twenty something’ and most will say they do not expect to buy until they are in their mid thirties – seven years later than the 1980’s. Some people even say they will never be able to buy a property and the newspapers have labelled them ‘Generation Rent’ as they are people born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing young Locks Heath people is the large deposit needed to get a mortgage… or is it?

The average price paid for an apartment in Locks Heath over the last 12 months has been £149,700 meaning our first time buyer would need to save £7,485 as a deposit (as 95% mortgages have been available to first time buyers since 2010) plus a couple of thousand for solicitors and survey costs. A lot of money, but people don’t think anything today of spending a couple of thousand pounds to go on holiday, the latest iPhone upgrade or the latest 4K HD television. That amount could soon be saved if these ‘luxuries’ were withheld over a couple of years but attitudes have changed.

Official figures, from the Office for National Statistics, show the average male in Fareham with a full-time job earns £628.80 per week whilst the average female salary is £476.00 a week, meaning, even if one of them worked part time, they would still comfortably be able to get a mortgage for an apartment.

I was reading a report/survey commissioned by Paragon Mortgages from the autumn of last year. The thing that struck me was that when tenants were asked about their long term housing plans, some 35% of participating tenants intend to remain within the rental sector and 24% intended to buy a house in the future, with the proportion of respondents citing the “unaffordability” of housing as the reason for renting privately increasing from 69% to 74%.

However, time and time again, in the starter home category of property (ie apartments), nine times out of ten the mortgage payments to buy a Locks Heath property are cheaper than having to rent in Locks Heath. It is the Tenant’s perception that they believe they can’t buy, so choose not to. Renting is now a choice. Tenants can upgrade to bigger and better properties and move up the property ladder quicker than their parents or grandparents (albeit they don’t own the property). Over the last decade, culturally in the UK, there has been a change in the attitude to renting so, unless that attitude changes, I expect that the private rental sector in Locks Heath (and the UK as a whole) is likely to remain a popular choice for the next twenty plus years. With demand for Locks Heath rental property unlikely to slow and newly formed households continuing to choose the rental market instead of purchasing a property. I also forecast that renting will continue to offer good value for money for tenants and recommend landlords pursue professional advice and adopt a realistic approach to rental increases to ensure that they are in line with inflation and any void periods are curtailed. One place for advice, comment and opinion is the Locks Heath Property Blog www.thelocksheathpropertyblog.co.uk.

I was speaking to a friend of mine this week who is looking to invest in some properties to let out.  He asked me for my opinion on what to look for when purchasing a Buy-to-Let property.  So I thought that I would pass on my advice to you lovely readers.

Your Return

The first and most obvious place to start is the annual return that you are going to get back from your investment.  A simple calculation dividing the projected annual rental income by the purchase price of the property and then multiplying the answer by 100 will give you a gross yield figure.

However if the property you are looking at is leasehold then you will also need to factor in any ground rent and maintenance charges in to your calculation.  The sum of these charges should be deducted from the projected annual rental income before the rest of the calculation above is carried out.

A quick look at current available stock on Rightmove tells us that the average gross yield on a two bedroom property in the SO31 area is currently 4.3%.  In Locks Heath though the average rental figure is slightly higher than the SO31 average at £900pcm meaning that the average gross yield is also higher at 5.1%.

Another thing for consideration that may have an effect on your yield, especially in the first year, is the condition of the property.  Are you going to have to do any work to get the property ready for the rental market?  Is it just decorative or are you talking new carpets or even bathrooms or kitchens?

What do Tenants want?

The next thing to look at is how in demand your property is going to be once you start offering it to the rental market.  The last thing you want is to start sweating over how easily you will find a new Tenant every time it comes up for re-let.  Currently in SO31 40% of properties listed to let on Rightmove are let agreed compared to 64% in Locks Heath.  Looking at the graph below the most popular size of property are one and two bedroom.

So what style of property do Tenants prefer?  The truth is that there are some people out there who only want a house due to their desire for outside space.  But there are also a lot of people that don’t want the ongoing maintenance of a garden so want an apartment or flat.  Whilst I always advise potential Landlords to emotionally detach themselves from their rental properties there is a lot to be said for choosing a property or even area that you would like to live yourself if you were in the Tenants’ shoes.  In a slower market curb appeal has a lot of say over whether your property fades in to the background on Tenants’ searches online and therefore whether or not to pick up the phone and come and view it.  Proximity to particular schools or bus train routes also plays a part in Tenants’ decisions so also bear this in mind.

Lastly consideration should be made to the future.  A good property should sell easily if you ever need to release some funds.  So if you are considering buying a property to let out you should buy a property that is going to be saleable.

If you are thinking of purchasing a Buy-to-Let property, whether you are an existing Landlord of mine or not feel free to give me a call on 01489 570011 or drop me a line at james.hill@brooklettings.co.uk.  I will always give you my unbiased opinion on any potential purchases.

For more articles like this visit The Locks Heath Property Blog.

Locks Heath’s continuing housing shortage is putting the suburb’s (and the Country’s) repute as a nation of homeowners ‘under threat’, as the number of houses being built continues to be woefully inadequate in meeting the ever demanding needs of the growing population in the suburb.   In fact, I was talking to my in-laws the other day at a family get together; the subject of the Locks Heath Property market came up in the conversation (as I am sure it does at many a get together and family party in Locks Heath) after the weather and politics. My mother-in-law said it used to be that if you went out to work and did the right thing, you would expect that relatively quickly over the course of your career you would be buying a house, you would go on holiday every year, you would save for a pension.   But now things seem to have changed?

Back in the Autumn, George Osborne, used the Autumn Statement to double the housing budget to £2bn a year from April 2018 in an attempt to increase supply and deliver 100,000 new homes each year until 2020.  The Chancellor also introduced a series of initiatives to help get first time buyers on the housing ladder, including the contentious Help to Buy Scheme and extending Right to Buy from not just Council tenants, but to Housing Association tenants as well.

Now that does all sound rather good, but the Country is only building 137,490 properties a year (split down 114,250 built by private builders, 21,560 built by Housing Associations and a paltry 1,680 council houses).    If you look at the graph below (courtesy of ONS), you will see nationally, the last time the country was building 230,000 houses a year was in the 1960’s.

How Mr Osborne is going to almost double house building overnight, I don’t know, because using the analogy of a greengrocers; if people want to buy more apples (i.e. houses) in a greengrocers’ shop, giving them more money (i.e. with the Help to Buy scheme) when there’s not enough apples in the first place doesn’t really help.

Looking at the Locks Heath house building figures, in the local authority area as a whole, only 400 properties were built in the last 12 months, split down into 350 privately built properties and 50 housing association with not one council house being built.   This is simply not enough and the shortage of supply has meant Locks Heath property values have continued to rise, meaning they are 7.5% higher than 12 months ago, rising 0.8% in the last month alone.

It’s all about supply and demand, this economics game.

The demand for Locks Heath property has been particularly strong for properties in the good areas of the suburb and it is my considered opinion that it is likely to continue this year, driven by growing demand among buyers (both Locks Heath homebuyers and Locks Heath landlords alike). You see Locks Heath’s economy is quite varied, meaning activity is expected to remain relatively strong into the early Summer of 2016, especially as some Locks Heath buy to let landlords try to complete purchases ahead of the introduction of new stamp duty rules in April.

.. and of supply, well we have spoken about the lack of new building in the suburb holding things back, but there is another issue relating to supply.   Of the existing properties already built, the concern is the number of properties on the market and for sale.   The number of properties for sale last month in Locks Heath was 90, whilst 12 months ago, that figure was 144 whilst three years ago it stood at 249… a massive drop!

With demand for Locks Heath property rising, minimal new homes being built and less properties coming onto the market, that can only mean one thing … now is a good time to be a homeowner or landlord in Locks Heath.

For more articles like this, please visit the Locks Heath Property Blog www.thelocksheathpropertyblog.co.uk.

Some commentators are saying buy to let is about to die, with the new stamp duty changes and how mortgage tax relief will be calculated. Some say 500,000 rental properties will flood the market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase ‘Bad news sells newspapers’? Let me explain why buy to let in Locks Heath is only going in one direction – and not the direction the papers say they are going.

According to Sheffield University, buy to let landlords will continue fuelling the growth of the private rented sector in the coming decades. By their estimates (and they are considered a centre of excellence on the topic), the rate of homeownership nationally will fall to 50% (today it is 75.8% in the Locks Heath area) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in Locks Heath area it stands at 12.3% today).

Therefore, the demand for rental accommodation in Locks Heath and SO31 postcode will grow by 471 households in the next five years ... and these are the reasons why, irrespective of the distractions set out in the newspapers.

Locks Heath property values over the last six years have risen a lot more than average wages/salaries, meaning as homeownership and mortgage availability is dependent on your ability to pay has served to push home ownership further out of reach for many, at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households – a drop of 31.1%).

Now it’s true the Tory’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much vaunted Help to Buy ISA, and Starter Homes Scheme, an initiative offering a 20% discount for first time buyers … but if you are unable to save for the deposit … none of this means anything to the ‘20 something’s’ of Locks Heath … and they still need a roof over their heads!

Currently, 5,151 people live in private rented accommodation in the Locks Heath and SO31 area. 

These are big numbers and a sizeable chunk of the electorate. So whilst it appears Locks heath “Generation Rent” youngsters will continue to rent and to not to buy for the reasons set out above, Locks Heath buy-to-let landlords will be lifted by the projections of greater rental demand. Locks Heath and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a lively and desirable place to live.

So, by 2021, the number of rental properties in Locks Heath and SO31 area will rise to 3,242.

This prediction in growth of the Locks Heath rental market is on the back of the government clamping down on tax reliefs for landlords. The point is this, gone are the days of making guaranteed returns on buy to let property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it  – but not now. You must take a more considered approach to your existing and future portfolio, especially in Locks Heath. The balance of capital growth and yield, especially in this low interest rate world we live in, means Locks Heath landlords need to do more homework to ensure the investment in property gives the desired returns. One place for Locks Heath landlords and homeowners to visit for such information is the Locks Heath Property Blog www.thelocksheathpropertyblog.co.uk.