The ‘Right
to Buy’ scheme a policy introduced by Margaret Thatcher in 1980 gave secure council tenants the legal right to
buy the council home they live in at a discounted sale price. The heyday of the Council ‘Right to Buy’ 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. In 1997 however, Tony Blair reduced the discount available to tenants of council
houses and as a result the numbers of properties being bought under the ‘Right
to Buy’ scheme began to decline. Local
housing associations have picked up the mantra and demand continues to be high.
So what does this mean for Solihull homeowners and landlords?
Looking at the overall figures, 5,895 Council properties were
bought by council tenants in the Solihull Metropolitan Borough Council area
between 1980 and 1998. These are large numbers by any measure and even more
important to the whole Solihull property market (i.e. every Solihull homeowner,
Solihull landlord and even Solihull aspiring first time buyers) when you
consider these 5,895 properties make up a colossal 14.3% of all the privately owned
properties in our area (because in the local authority area, there are only 41,098
privately owned properties).
Solihull first time buyers and landlords are now able to buy
these ex-council properties second hand 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 of the available ex-council properties
lack the vital curb side appeal that a handful of landlords crave. Developers
of new builds know all about curb side appeal as they dress up the exteriors of
their new homes to make them more appealing to buyers.
We find that 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. Remember the
first rule of buy to let property is that you aren’t going to live the property
yourself. What an ex-council property
lack in terms of curb side appeal, they more than make up for in other ways
such as location. Tenants will be more concerned about how close the property
is to a particular school or family members for child care rather than the look
of a property.
Ex-council properties tend to increase in value at a slower rate
than the more modern properties, however this is more than made up for with the
higher yields plus those built between the wars or just after are really well
built. Demand for such properties is good due to the current value of Solihull
properties and the tough lending criteria, people will reconcile themselves to
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 Solihull properties
in the 80’s and 90’s, means that today’s younger generation who would have
normally been able to get a council house are now unable to as many were sold
ten or twenty years ago.
So to Solihull landlords my recommendation is: don’t dismiss ex-council
houses and apartments but remember the first rule of buy to let. Solihull landlords should go in with an open
mind and take as much advice as possible. 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. For tips and advance on the Solihull property market please email me on jane.morcom@centrickproperty.co.uk
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