There are lots of news stories about what’s happening in the property market – mostly with the aim of ‘talking it down’ or, of course, having a go at the so called ‘evil landlords’!
However, nothing could be further from the truth based on the latest information from the long running and in-depth Quarter Two Belvoir Index.
The index tracks rents in two ways. It looks at rental changes for Belvoir offices which have been trading since 2008, giving a like for like comparison on rents over time. We then secure individual feedback from franchise owners, which means that as an existing or new to letting landlord, you can find out what’s actually happening in your individual area, not just ‘on average’.
Knowing which area is oversupplied with one bed flats, and which is undersupplied is crucial for landlords both now and in the future. Without local knowledge about the rental market, it’s easy to make expensive mistakes which can mean your investment doesn’t deliver. Having the right information can mean you survive bad markets and can make the most of the good ones.
What’s the latest trends from the Belvoir Index? In the main there are three key trends to be aware of, but they don’t apply to every area, so it’s important to check out what’s happening in your local area too:-
1. House rentals – demand high, supply mainly low
a. Just over 26% of offices reported static house rents versus Q2 19
b. 66% of offices recorded increased rents compared to the previous year
c. 7% of offices reported falling house rents for Q2 20
2. Flat rents – demand static, slight oversupply in some areas
a. 40% of offices reported unchanged rents for flats versus Q2 19
b. Just under 43% of offices saw increased rents compared to the previous year
c. And just over 16% of offices reported falling rents during Q2 20
3. HMOs – tough market, oversupplied in many areas
The reality in the rental market is that when demand is high and supply low, if wages allow, rents can rise. When demand is lower than supply, the trick is to make sure you don’t have any voids and you can do this by ensuring your property is rented out at a great rate and in the best condition, as they are always the ones that survive.
What’s the ‘general view’ of the rental market according to Belvoir? Firstly the good news is for landlords letting through Belvoir, to date, rent collection has been very successful, with no more offices than pre-Covid experiencing rent arrears and, as a result, the number of evictions, usually very low anyway, has remained so.
Across the UK, as usual, rents are going up, down and staying the same, depending on the type and location of the property.
Despite the general trend of flat rents being static to falling, there are lots of offices which buck the trend including:-
Scotland Dundee Nick Horan of Dundee reported increased rents for houses due to high demand, and also for flats, with one and two beds remaining the most popular. Tenant demand also increased across the board. Nick expects both rents and demand to rise over the coming quarter due to a shortage of one/two bed flats and three/four bed houses.
Paisley According to Denise Rhodes, both rents and demand increased across the board for Q2 2020 and this trend is likely to continue over the coming quarter. Paisley has a shortage of all types and sizes of property to rent.
For a detailed rental report on Moray, please read the full report.
Wales Swansea For Q2 2020, Ben Davies confirmed an increase in rents and demand across the board, with this trend likely to continue over the next quarter. Swansea is currently experiencing a shortage of one bed flats and an oversupply of two bed flats.
Northern Ireland Newtownards According to Trevor Burns, rents and demand increased for all properties during Q2 2020 and confirmed that unless supply increases, rents will continue to go up. Demand for all properties is also likely to increase during the next quarter. The office has a shortage of all sizes and types of property.
Milton Keynes Steve Tunney from Belvoir Milton Keynes has a wealth of lettings experience in this area having just completed 20 years of letting properties under the Belvoir brand. His view this quarter is that there has been a slight increase in rents of around 5% with tenant demand also increasing for all properties. Over the next quarter he expects rents to remain stable
for all properties with demand increasing. The Milton Keynes office is experiencing a shortage of one and two bed properties and an oversupply of three and four bed houses.
For more detailed reports from offices in the South East, including: Thanet, Chelmsford, Rochester, Newbury, Brighton and Hove, Luton, Watford, Tunbridge Wells and Tadley, please read the full report.
Gloucester According to Anthony Stick, all rents have increased together with demand for flats and houses but decreased for HMOs. Rents and demand for all properties is expected to continue increasing over the next quarter, with the exception of room rents which are likely to decrease. They are currently experiencing a shortage of two and three bed properties and an oversupply of room rents.
For more detailed reports from offices in the South West, including: Christchurch, Aldershot and Devizes, please read the full report.
Stoke on Trent A popular area for landlords who let outside of where they live, Ramona Hirschi reported static rents for flats but increasing for all houses during Q2 2020, whilst tenant demand remained unchanged for flats, increased for houses and fell for HMOs. Over the next quarter, demand and rents for flats are expected to remain static, increase for houses and demand for room rents decreasing. The office is experiencing a shortage of three to five bed houses with an oversupply of all flats and room rents.
Shrewsbury Paul Wallace-Tarry recorded an increase in rents and demand across the board for Q2 2020 and this trend is predicted to continue over the next quarter. Shrewsbury is currently experiencing a shortage of all types and size of property to rent.
Cheltenham For Q2 2020, Neil West confirmed increased rents for all properties with demand for flats and houses remaining unchanged but falling for HMOs. Both rents and tenant demand are predicted to remain static during Q3 2020. Cheltenham has a shortage of most types and size of property.
Long Eaton and Beeston For Q2 2020, Francesca Barlow-Goodall confirmed that rents and demand for all properties
increased and this trend is likely to continue over the coming quarter. All property types and sizes are in short supply due to the speed properties are being let.
For more detailed reports from offices in the Midlands, including: Nottingham, Melton Mowbray, Newark, Telford, Rugby, Leamington Spa, Stafford and Stone, please read the full report.
Skipton For Q2 2020, Daniel Johnson reported rental rises for houses and flats due the increased demand, with the exception of HMOs, where demand fell. Over the coming quarter, rents and demand are expected to increase for flats and houses but remain unchanged for room rents. They currently have a shortage of one through to four bed properties.
For a detailed report from the Harrogate office, please read the full report.
Tynedale John Redden of Tynedale has reported steady but small increase in rents across the board as properties have become available for rent during Q2 2020. A few landlords have increased rents on periodic tenancies between 2% and 4%. Demand increased for houses but they are small numbers, however there appears to be a trend building to look for property with some outside space. Demand fell for flats. Rents are expected to increase across the board during Q3 2020, whilst demand for houses is likely to increase but decrease for flats. Tynedale is experiencing a shortage of two to four bed houses.
For a detailed report from the Newcastle-upon-Tyne office, please read the full report.
Bolton According to Mike Stuttard, all property rents and tenant demand increased during Q2 2020. However, rents and demand are expected to remain stable over the next quarter. They are currently experiencing a shortage of all houses, whilst two bed flats are in abundance.
For more detailed reports from offices in the North West, including: Chester and Warrington, please read the full report.
What are Belvoir forecasting for Q3 rents in 2020 Each office that gives a detailed report on their rental market explains what happens to
rents currently but also gives a forecast of what they expect to happen to rents in Quarter Three.
In the main, the majority of Belvoir agents predict:-
1. Rising rents for houses
2. Flats rents are likely to remain static, with some rising
3. Room rents are predicted to remain static to falling
If rents are expected to rise in your area, then it doesn’t necessarily mean you can increase rents as this relies on tenants securing higher wages, which during this time is unlikely, however if supply is short, this may be possible.
If rents are expected to be static to falling, then it’s worth renting your property at a good rate to ensure you don’t suffer any voids going into Christmas, and remember, it’s better to rent for six months at £700 than lose £1,000 over two months hoping to achieve £750 a month.
For expert, honest, local advice on the rental market and help getting into buy to let or with what to do with your existing portfolio, do talk to your local Belvoir experts.