As my regular readers know, my passion is talking about Cambridge property. As a property agent I like to comment on the Cambridge 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 Cambridge as more and more of their wages are being taken up by ever increasing rents.
The cost of renting a home in Cambridge has nearly broken
through the £1300 a month barrier as the average rent for a property in the
city, now stands at £1288 per month, a rise of 0.7% last month, leaving rents
for new lets 0.4% higher than they were 12 months ago.
House price inflation has certainly eased in Cambridge 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 Cambridge rents are a sign that the Cambridge economy is
picking up.
This means Cambridge landlords are continuing to capitalise
on the Cambridge property market. The most recent Land Registry data suggests
the annual property price rises in the city have eased over 2015, leaving
property values 7.11% 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 156 Cambridge properties up
for rent between £500 to £1000 per month is 61 days, whilst the average length
of time the 244 properties at £1000 to £2000 per month is 52 days and 60
properties that fall into the £2000 to £5000 per month price bracket is an eye watering
101 days.
When you start comparing different parts of Cambridge, the
numbers are even stranger! The bottom
line is that you must take advice and opinion. One source of advice and opinion
is the Cambridge Property Blog. In the Cambridge 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 Cambridge property Blog http://cambridgeproperty.blogspot.co.uk/
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