Are landlords going to suffer from post-election Blues in Solihull?

With the election now well and truly behind us and the stability of Downing Street secure, average wages are beginning to grow faster than inflation. This is good news for the Solihull housing market, as some buyers may be willing or able to pay higher prices (given the more certain political outlook and attractive inexpensive mortgage rates). However, sellers who think they have the upper hand, due to the lack of property for sale, should be aware that we should start to see an increase in the number of people putting their properties on to the market, giving buyers some extra negotiating power.

At the last election in May 2010, there were 634 properties for sale in Solihull and by October 2010, this had risen to 816, an impressive rise of 29% in five months. An increase in the supply of properties coming on to the market could tip the balance in the demand and supply economics seesaw, thus potentially denting prices. However, as most sellers are also buyers and confidence is high, this means we should see a slight price rise throughout the summer, as demand will continue to outstrip supply.

I mentioned a few weeks ago that property values (i.e. what properties were actually selling for) had dropped by 1.7% in March 2015. Now, new data has been released from Rightmove about April’s asking prices of property in Solihull. It shows that pre-election nerves finally came home to roost in the final weeks of electioneering, with the average price of property coming to market only increasing by a very modest 0.3% (April is normally one of the best months of the year for house price growth).

I am sure our local MP, Julian Knight, would agree that the biggest issue is the lack of new properties being built in Solihull. The Conservative manifesto pledged to build 200,000 discounted starter homes for first-time buyers in the next five years. Seems like quite a lot, so will this solve the problem? Well, if we get our fair share (a big if), that would mean only 74 properties being built in Solihull each year for the next five years, which is not much when you consider there are 40,975 properties in the borough.

Generally, housing is not a normally a big issue for Conservative voters and because London is an increasingly Labour city where the biggest housing issues are found by a country mile, housing supply will likely remain on the ‘to do list’ but it may not get recognition it deserves. Until another political party gets back into power, nothing will seismically change in the property market, thus demand for housing will continue to outstrip supply, meaning property values will increase (good news for landlords). However, as rents tend to go up and down with tenant wages, in the long term, rents are still only 5.65% higher than they were in 2008 (good news for tenants)... with renting everyone wins!