58.7% of Solihull Tenants are White Collar Middle Class

With Solihull youngsters not able to buy their own property, my research suggests there is a progressively more important role that the private rented sector has been playing in housing people in need of a roof over their head. Especially at a time of increasing affordability problems for first time buyers and growing difficulties faced by social housing providers (local authorities and housing associations) in their ability to secure funding from Westminster and then compete against the likes of the Crest Homes  and David Wilson Homes of this world to buy highly priced building land.

Renting isn’t like it was in the 60’s and 70’s, where tenants couldn’t wait to leave their rack-rent landlords, charging sky-high rents for properties with second world war wood chip wallpaper, no central heating and drafty windows. Since 1997 with the introduction of buy to let mortgages and a new breed of Solihull landlord, the private rented sector in Solihull offers increasingly better quality accommodation for younger Solihull households.

So whilst I knew in my own mind that the type and class of tenant has improved over the last 20 years, I had nothing to back that up ... until now. According to some detailed statistics from Durham University just released, for the Solihull Metropolitan Borough Council area, the current situation regarding social status of tenants shows some very interesting points. Using the well known Demographic ABC1 grade classifications which refers to the social grade definitions.

Of the 12,277 tenants who live in a private rented property in the Solihull Metropolitan Borough Council area, 25.98% of those tenants are classified in the AB category (AB Category being higher and intermediate managerial / administrative / professional occupations), compared to 31.55% owner occupiers who own their property without a mortgage or 3.49% who rent their property from the local authority.

Looking at the C1’s (C1’s being the supervisory, clerical and junior managerial / administrative / professional occupations), of the already mentioned 12,277 tenants in the area, an impressive 4,028 of them are considered to be in the C1 category. Again, when compared with the owner occupiers who own their property without a mortgage, that figure stands at 32.22% and 18.53% who rent their property from the local authority.  So, if we use the conventional measurements recorded by the white-collar “ABC1” i.e. middle class ….This means 58.79% of tenants are considered middle class in Solihull.

I could go through all of the social categories through to ‘E’, but I don’t want to bore you with too many numbers. The fact is that private tenants are moving up the social ladder and whilst back in the 60’s and 70’s, the private rented sector in Solihull (and the rest of the UK) has customarily been viewed as a temporary tenure for 20 somethings before they bought a property, the increase in renting in Solihull may be a reflection of increasing difficulty for this group in accessing other tenures, but may also be a reflection that people nowadays choose to rent long term instead?

Solihull Landlords need to be aware that tenants now demand more from their properties, the agent and their landlord and whilst affordability for first-time buyers and tighter controls on lending may mean that potential first-time buyers are in the private rented sector for longer, they will still pay ‘top dollar’ rent for a ‘top dollar’ property.

962 Solihull Properties lie empty– An injustice for the 8,268 people on the Solihull Council House Waiting List?

Easy problems should have easy solutions  - shouldn’t they?

Problems like Solihull’s housing crisis, where we have a rudimentary numerical problem of too few homes for too many people ... the answer is clearly to build more property in Solihull  but that, unfortunately for those desperately seeking to purchase or let a property, takes a lot of time and huge amounts of money. So what about other solutions?

The most recent set of figures from 2015 state that there are 962 empty homes in the Solihull Metropolitan Borough Council area. So it begs the question, why not put them back into the system and help ease the Solihull housing crisis? There are reportedly 8,268 Solihull households on the Council House list waiting for council houses. Surely, we can undoubtedly all agree that property left empty for years isn’t morally right with the burgeoning Council House waiting list, also not to mention the issue of homelessness.

But a different story emerges when you look deeper into the numbers. Of those 962 homes lying empty, only 114 properties were empty for more than six months. The local authority has to report a property being empty, even if it’s only for a week. So many of the Solihull properties are either awaiting new homeowners or, in the case of rental properties, new tenants. Also most certainly, some properties are being refurbished and renovated, while other properties have homeowners who are anxious to sell but cannot find a buyer.

And this is perhaps even more interesting. Of the 114 long-term vacant properties (those empty more than six months), 104 belong to the council. However, before we all go Council-bashing, there is evidence that suggests these empty council houses may be in need of so much restoration that it’s not worth the Council’s while to do and are in the roughest parts of the council estates, they are properties that even the Council find difficult to fill.

The fact is that the number of genuinely long term empty properties is only a tiny drop in the ocean of the 86,056 properties in the area covered by Solihull Metropolitan Borough Council and even if every one of those empty homes were filled with tenants tomorrow, it would only meet a small fraction of Solihull housing needs.

So what does this mean for all the homeowners and landlords of Solihull? Well it means with demand being so high for rental properties, the certainty of the rental market growing is inevitable because young people cannot buy and councils don’t have the money to build new council houses. This in turn bolsters property prices as landlords continue to buy at the lower end of the market which in turn sustains the rest of the market as those sellers move up the property ladder, releasing others in turn to buy on again.

These are interesting times in the Solihull property market!

Brexit and Solihull Property market – 20% more properties on the market

April Fools Day was no joke for some landlords, as they rushed their buy to let property purchases through to complete by the end of March, in order to beat the extra 3% stamp duty George Osborne was imposing on second homes after the 31^st March 2016. Speaking to fellow property professionals in Solihull we have all noticed following the increase in sales going through in March, demand to buy in April and May from landlords has eased.

Then we have the Brexit issue, which is also having a tempering effect on the Solihull property market and whilst an exit will have an effect, it won’t be the end of the world as some commentators are suggesting. In an article I wrote previously, I wrote about the growth rate of Solihull property values and whilst the rate of growth is slowing, Solihull property values are still 6.4% higher year on year. Albeit the growth rate month on month has started to moderate when compared to the heady days of 2014 and 2015. Interestingly 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.

In the B92 postcode, which mainly comprises of Olton, Elmdon, Bickenhill and Hampton-in-Arden, there were 224 properties for sale in December. In January, February and March, 261 properties came onto the market in the postcode district, meaning by end of the first Quarter, there were 271 properties available for homeowners and landlords alike to buy in B92.These figures are mirrored in neighboring postcodes throughout the Solihull area.

I believe this easing of the Solihull property market is a good thing, as investment landlords won’t have to over the odds to secure a property because of the reduced competition. You would expect this easing to be bad news for the 101,762 Solihull homeowners 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 will have achieved an excellent figure for your property, you will have had to have pay an even higher price to secure the one you wanted to buy. This illustrates the swings and roundabouts of the Solihull 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 Solihull property and the supply will still exercise a sturdy and definitive influence on the Solihull property market. It would 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 22% higher than they are today.