I want you to think back – if you’re old enough! – to 1981. Mrs. Thatcher was in power, Charles and Diana were married, the Burton Albion manager was Neil Warnock, Shergar won the Derby and Bucks Fizz won Eurovision with ‘Making your Mind up’. Haven’t things changed.
The number of homeowners and property investors who said “Hindsight is a wonderful thing” and wished they had bought up every house in Burton all those years ago, especially when you consider what has happened to Burton property values,..
Burton on Trent Property Values since 1981 have risen by 698%!
Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms, after inflation, property values in Burton are 426.1% higher. It’s no wonder people can’t afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the local property market run much deeper than property value changes as no one could have predicted how the property market has changed in Burton over the last 35 years.
Looking at the Local Authority data for East Staffordshire Borough Council in 1981, 23.7% of Burton people lived in a Council House, whilst today its 13.5% … a massive drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House. The private rental sector since 1981 has, as one would have expected, also changed.
Nationally, private renting has almost doubled, however, the proportion of properties privately rented in the Burton area – through a private landlord or a letting agency – may not have doubled but it has certainly increased, rising from 10.3% to 15.1%.
So, let us consider those people who own their own home, surely that has had a massive drop?
In 1981, the proportion of people who lived in the East Staffordshire Borough Council area who owned their own home was 65.9%… and today its… 69.6%. Not the seismic change most of you were expecting, including myself!
Home ownership in the 1980’s and 1990’s in Burton did in fact rise, but as I have discussed in previous articles in the Blog’ that was because nearly every Council tenant was buying their council house. Now there are hardly any Council houses for the younger generation to move into because of the right to buy scheme, so, they have no choice but to privately rent.
.. and this is why the buy-to-let market in Burton is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year like they were in the 1950’s/60’s and 70’s. The property market is constantly changing and for too long, buy-to-let has been heavily dependent on house price growth, where yield has been almost forgotten. I see the changes in tax and landlord and tenant law in a different perspective to the sooth-sayers out there. I see it as bringing many opportunities where yield will become more important. You might need to change your buy-to-let targets, your methodology to financing or even consider places other than Burton in which to invest your money, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.
Like Bucks Fizz said in their song.. “There comes a time for making your mind up”!
The advice I give to my landlords, and also to you my blog readers is this; these changes will make some landlords panic, meaning competition for decent Burton buy-to-let bargains will reduce as fear of change kicks in and amateur investors flee the market. These opportunities will provide a more stable platform for knowledgeable and wise landlords to thrive in.
If you want to learn more about the Burton property market, feel free to pop in for a coffee at our office for a chat with me, or failing that, sign up to the Blog, where you will find many more articles like this solely on the one topic of the local property market.