Only 2,859 Council Houses remaining in Solihull…

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