Music to the ears of buy to let investors…
Source: The Rightmove Rental Trends Tracker, Q2 2015
According to recent property research, 22 per cent of all households in the UK are in the private rental sector, a figure that is expected to grow over the next few years. In the South East and the East of England, rents have outperformed London in terms of quarterly and annual rental growth, whilst demand has hit an all-time high, Fenn Wright, has highlighted this is music to the ears of buy to let investors as home ownership remains an unrealistic dream for too many people still, creating a strong pool of trapped tenants seeking better value for money and an enhanced lifestyle.
The research states that 61 per cent of properties across the UK are owner occupied – precisely the same percentage as in 1985. Whereas the private rented sector has changed significantly, with 22 per cent renting from private landlords today, as opposed to only nine percent 30 years ago.
Source: The Rightmove Rental Trends Tracker, Q2 2015
In the past year tenant demand for rental property has hit an all-time high nationally with a 52% increase in email enquiries, the East of England seeing the highest increase, up by 64%, according to The Rightmove Rental Trends Tracker. Chelmsford, where Fenn Wright has one of its branches, ranked 5th place for areas outside of Greater London that are in most demand from tenants.
Source: The Rightmove Rental Trends Tracker, Q2 2015
Rental growth has been very strong too for these regions too. The average asking rent per month has increased quarterly 4.1% for the South East and 2.7% for the East, outperforming London (+2.0%). Meanwhile, the annual figures have beaten London too, at 5.7% and 5.2% respectively. The average monthly asking rental price for the South East is £1,078 per month, the second most expensive region in England and Wales, followed by the East at £850 per month.
Jon Barker, Associate Partner – Chelmsford Lettings at Fenn Wright explains: “These figures by Rightmove quite literally say it all, which is great news for new landlords or those looking to expand their portfolios in a growing market. Tenants are looking for affordability and a sense of escapism, with easy access to the City – something they simply cannot get in London. All of this pushes asking rents of properties upwards.
“Many tenants still can’t afford to climb onto the housing ladder, despite various Government initiatives to help them. Furthermore, our local markets are being fuelled by demand outstripping supply, particularly in the most sought after areas. The lack of supply is due to tenants staying longer in their homes, and so good quality properties at the right price are being snapped up within 48 hours of coming to market. The moment we list a property on one of the portals, the enquiries often start rolling in within the same day, sometimes hours.
“All of these factors combined should offer buy to let investors encouragement, especially following the summer Budget’s announcement of a clampdown on tax relief. It reinforces what we have been saying at Fenn Wright that our experience shows that the private rented sector is continuing to grow rapidly. The demand from tenants for quality rental accommodation is at an un-precendated high with our enquiries from tenants up year on year. Choosing the right type of property is key and our experienced professionals are on hand to give landlords expert advice across Essex and Suffolk.’’