Considering we are
a quarter of the way through 2015 and Easter under our belt, I was talking to
landlord from Highburton the other day about what is happening to the level of
rents that are being achieved in the Huddersfield property market.
In terms of rents in Huddersfield, it appears that rents being achieved for new rentals (ie
when the tenant moves out and new tenant moves in) have risen in the order of 3.4%
in the last 12 months on top of the range properties, yet remained static for
more basic accommodation. However, landlords with existing sitting tenants,
irrespective of condition are not increasing their rents, as most landlords
prefer to keep their existing tenant paying the same rent and have the peace of
mind that their tenant remains, paying the rent (thus reducing the risk of a
void period).
It must be remembered
rents only rose by 0.5% over 2008 and 2009, due to oversupply in the rental market).
A lot of the people who couldn’t sell their property in Huddersfield in 2008/9
when the Credit Crunch hit in 2008, decided to let their house out instead of
selling at a loss. In fact, the number of houses on the market in Huddersfield
dropped by 29.7% between February 2008 and April 2009, a lot of which came on
to the rental market in Huddersfield. However, looking at the longer term
though, tenants have had it good because
since the turn of the Millennium, average wages have grown by 46%, but rents
have only grown by 36% over this period.
I told the landlord
that there is a lack of new rental properties in Huddersfield coming on the
market, in fact according to the Office of National Statistics, there are only 30
new rental properties are coming to the market each month in Huddersfield but
the population of Huddersfield is rising by 81 people a month – something will
have to give soon! 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 in Huddersfield has improved. This 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 Huddersfield, historic
evidence in the UK suggests private market rents have moved in line with
general 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 in Huddersfield has eased off
recently, rising by only 1.3% in the last 12 months, taking average salaries in
Huddersfield to £21,816pa, 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.
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