Only 369 council houses in the Oakham and Rutland area left - opportunity or problem?

The ‘Right to Buy’ scheme was a policy introduced by Maggie Thatcher in 1980 which gave secure council tenants the legal "right to buy" the council home they were living in with huge discounts.

The heyday of the council ‘Right To Buy’ scheme 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. However, in 1997, Tony Blair reduced the discount available to tenants of council houses and the numbers of properties being bought under the ‘Right to Buy’ declined.

So what does this mean for Oakham homeowners and landlords? Well, quite a lot in fact!

Looking at the figures for our local authority, whilst the number of ‘Right to Buys’ have dwindled over the last few years to an average of only 20 ‘Right to Buy’ sales per year, one must look further back in time.

Looking at the overall figures, 935 council properties were bought by council tenants in Rutland between 1980 and 1998. Big numbers by any measure and even more important to the whole Oakham property market (i.e. every Oakham homeowner, Oakham landlord and even Oakham aspiring first time buyers), when you consider these 935 properties make up a colossal 8.8% of all the privately owned properties in our area (because in the local authority area there are only 10,556 privately owned properties).

Oakham first time buyers and landlords can now 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 (not all), ex-council properties lack the vital “KSA” (Kerb Side Appeal!). The new homes builders know all about KSA, as they dress up the exteriors of their new homes to make them more appealing to buyers.

Yes, the modern stuff being built in Oakham is lovely, but too 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 thinking about where a tenant would want to live.  Remember the first rule of buy-to-let property – “you aren’t going to live the property yourself”.

What an ex-council property lack in terms of ‘KSA’, they more than make up for in other ways. Tenants care more about how close the property is to a particular school or how close it is to family members for childcare support, than the overall look of a property.

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, that is more than made up in the much higher yields – and those built between the wars or just after are really well built.

Tenant demand for such properties is buoyant since Oakham property values are high.  Many are simply unable to buy a property, or one big enough to suit their family’s needs, so they will reconcile themselves to renting, resulting in a good rental demand for that genre of property.

Also, the very fact the council were forced to sell these Oakham properties in the 80’s and 90’s means that today’s younger generation (who would have normally been considered for a council home themselves), find themselves in a different position to previous generations, as there simply aren’t the number available, or even being built.

So to Oakham landlords, don’t dismiss ex-council houses and apartments – but remember the 1^st rule of buy-to-let (see above).

However, those very same Oakham landlords should go in with their eyes open and take lots of advice. 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.

A useful resource for free advice and information on such matters is within this blog.

That just leaves the 369 council houses still owned by Rutland County Council to be sold to their tenants in the coming years!

 

 

(Data Sourced from The Office of National Statistics for Rutland, on the council sell offs and property numbers and The Census for council house numbers).