As my regular readers know, my passion is talking about Plymouth
property. As a property agent I like to comment on the Plymouth property
market, which I hope will be of interest to both homeowners and buy to let
landlords alike. However, this week, I want to highlight the plight of the tenants
of Plymouth as more and more of their wages are being taken up by ever
increasing rents.
The cost of renting a home in Plymouth has broken through the
£700 a month barrier as the average rent for a property in the city, now stands
at £724 per month, a rise of 1.2% last month, leaving rents for new lets 10.3%
higher than they were 12 months ago.
House price inflation has certainly eased in Plymouth from
the heady days of 2014, but still with retail price inflation (for goods and
services) reducing to 0% any increase in property values, no matter how small,
means in real terms property is still getting more expensive. Meanwhile, many
tenants have given up saving for a mortgage deposit as rents continue to take more
and more of their wage packets leaving nothing to save for a deposit. That
means, more and more tenants are deciding to rent for the long term and
therefore the desire for decent high quality rental properties continues to exceed
the available rental stock.
I would go as far as to suggest that rents are an ideal
barometer to the state of the local economy as a whole and strongly believe that
the recent increase in Plymouth rents are a sign that the Plymouth economy is
picking up.
This means Plymouth landlords are continuing to capitalise
on the Plymouth property market. The most recent Land Registry data suggests
the annual property price rises in the city have eased over 2015, leaving
property values only 2.37% higher than 12 months ago, so as property price
growth is easing off, with the increased rents, rental yields are strengthening
for the first time in years to compensate. The mortgage market has become more
stable after the mad months of May and June after the Tory’s got back into
No.10, and so, everything is set to be good news for landlords; even with the
Chancellors change of tax rules in the coming years for buy to let mortgages.
You can get some amazingly low mortgage rate deals at the
moment, so with mortgage rates so low and returns still extraordinarily attractive,
there’s rarely been a better time to invest in rental properties.
However, (you knew there would be a however!), it’s all
about buying the right property at the right price. Not all property types are
seeing equal rises in rents and capital growth.
Different parts of the city, different types of properties are
experiencing quite different changes.
For example, the average length of time the 336 Plymouth properties up
for rent between £250 to £500 per month is an eye watering 160 days, whilst the
average length of time the 397 properties at £500 to £1000 per month is 58 days
and 84 properties that fall into the £1000 to £2000 per month price bracket is 90
days.
When you start comparing different parts of Plymouth, the
numbers are even stranger! The bottom
line is that you must take advice and opinion. One source of advice and opinion
is the Plymouth Property Blog. In the Plymouth Property Blog, you will see many
more articles like this, discussions and even what I consider to be the best
buy to let deals around, irrespective of which agent is selling it.
Whether you are a landlord, ‘Homes Under the Hammer’ addict
or just a homeowner who is interested in what is happening to the local
property market, then please visit the Plymouth property Blog www.plymouthpropertyinsight.co.uk
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