I was talking to landlord from Hoddesdon the other day about what is happening to the level of rents that are being achieved in the local property market and in particular the increases over the last year.
With regard to Hoddesdon, it appears that rents being achieved for new rentals (i.e when the tenant moves out and new tenant moves in) have risen on average over 9% in the last 12 months on one and two bedroom apartments and two/three bedroom Houses, yet have increased at a slightly lower rate of 6% on larger properties. However, landlords with existing sitting tenants, irrespective of property type are not increasing their rents, as most landlords prefer to keep their existing tenant paying the same rate and have the peace of mind that their tenant remains in occupation and therefore reducing the risk of void periods.
Bear in mind that rents only rose by 0.2% over 2008/9 due to a slight oversupply in the rental market in this period. A lot of the people who couldn't sell their property in Hoddesdon, Ware and surrounding areas when the Credit Crunch hit in 2008, decided to let their house out instead of selling. In fact, the number of houses on the market dropped by over 50% between October 2007 and April 2010, a lot of which came on to the rental market locally.
I told the landlord that there is a lack of new rental properties in Hertford, Hoddesdon and Ware coming on the market, in fact according to the Office of National Statistics, there are only 29 new rental properties are coming to the market each month but the population of this region is rising by 130 people a month. This is compounded by the fact a number of landlords are looking to sell their rental properties in the coming months, as the property market improves. This fact is further further compounded as tenants in existing rental properties appear to be staying in properties for longer periods of time.
Looking at the rents charged in Hoddesdon, Ware, Hertford and surrounding areas historic evidence in the UK suggests private market rents have moved in line with inflation. Government figures only go back as far as the year 2000, but looking at other countries with similar housing markets (America, Australia, Ireland and Holland) the fact is rents paid by tenants tend to rise in line or just ahead of inflation.
As short term wage growth locally has eased off recently, rising by only 1.3% in the last 12 months, taking average salaries in Hertfordshire to £37,696pa, with the tax breaks announced by The Chancellor in the Budget, I believe, even though rents have kept pace with inflation in the past, renting as an option has become more affordable, and is increasingly seen as a lifestyle choice. With returning economic growth and expected increases in the rate of growth of wages, above inflation rental growth could rise.
If you are looking to invest locally and want to discuss the local rental market please feel free to come into our High Street offices in Stanstead Abbotts and we will be happy to give you some free unbiased advice or just give us a call we would be happy to hear from you.
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I have been in and around the Hertfordshire property market for over 25 years, starting as an estate agent in the county town of Hertford and now running a successful lettings and property management company based in Stanstead Abbotts. I have let and managed property all over Hertfordshire from the area that I currently work to Wheathampstead where I owned and managed a lettings & estate agents to Watford and surrounding areas where my company acted as a marketing agent for one of the largest property management companies in the country”
