As we are a quarter of the way through 2015, I was talking to a
landlord from Great Waltham the other day about what is happening to the level
of rents that are being achieved in the Chelmsford property market.
In terms of rents in
Chelmsford, it appears that rents being achieved for new rentals (i.e. when the
tenant moves out and new tenant moves in) have risen by 14% in the last 12
months. However, landlords with existing tenants are generally not increasing
their rents in line with this rate, as most landlords prefer to keep their
existing tenant paying the same rent. This gives the landlord peace of mind that their
tenant remain thus reducing the risk of a void period.
It must be remembered
rents nationally dropped by 7.8% over 2008/9, due to oversupply in the rental
market in 2009.) A lot of the people who couldn't sell their property in Chelmsford
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 Chelmsford
dropped by 30% between March 2008 and March 2010, a lot of which came on to the
rental market in Chelmsford. However, looking at the longer term tenants have had it good because, since the turn of the Millennium,
average wages have grown by 46%, but rents outside London have only grown by
36% rental growth over this period.
I told the landlord that
there is a lack of new rental properties in Chelmsford coming on the market, in
fact according to Rightmove, there is an average of 85 new rental properties coming to the market each month in Chelmsford, but when we have registered on
average 235 potential tenants each month since January, 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 Chelmsford
has improved. This further compounded as tenants in existing rental properties
appear to be staying in properties for longer periods of time.
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 want a chat about the local Chelmsford property market, pop
in for a coffee to our office in Duke Street.