The newly published Homelet rental Index for February 2014 is showing average rents for February of £714 pcm down some 3.9% from January but up 3.3% when compared to the same time 12 months ago. So a monthly decline but an increase year on year. The problem with month to month comparisons when using data from a referencing company such as Homelet is that the availability of either higher or lower rental properties which help shape the average figure can vary month to month. To make any sense from these figures, we need to see half yearly or annual comparisons. However, the trend seems to be, as we predicted, a flattening in rent levels, or as an economist would say, “rents are increasing at a decreasing rate”.
Is this borne out by what we’re seeing in Norwich? Yes, pretty much – the average rent on the portfolio we manage on behalf of clients is still £710 pcm which is up 3% from March 2013.
The recently released English Housing Survey reveals how the number of people living within the private rented sector has almost doubled since the early 2000s. The report also shows how nearly half (44%) of private renters expect it will be five years before they’re able to buy a home – compared with only a quarter (23%) who anticipate they’ll buy their own home within two years. This despite the much vaunted Help to Buy Schemes which we thought would be dampening rental demand anytime now! For Landlords, this is definitely a case of “Long Live Generation Rent”.
More people renting than ever also means there are many plans in place to regulate the private rented sector. See our separate article entitled “Tenants Could Get More Rights Under New Legislation”. The introduction of a model tenancy agreement, code of practice for letting agents, long-term tenancies and a fees cap are just some of the proposed initiatives being looked into by the Government. Dealing with rogue landlords and sub-standard rental properties are also other ways the Government hopes to develop the private rented sector and instil more confidence in people that renting a home is actually a good housing solution – for people of all ages, professional status and those with or without families.
The private rented sector has now overtaken the social sector in terms of number of people living in this way, and the number of owner-occupiers decreased from 71% during the past 10 years to 65%. It is a strong suggestion of how people’s confidence has grown in the industry with 20% of the adult population expected to be living within the private rented sector by 2015. Actually, that’s not much of a stretch since the figure is already in excess of 17%.
And finally, where are house prices in East Anglia? Well, according to the report published by the Nationwide Building Society earlier this week, prices nationally have recovered to within 3% of their peak in 2007. Interestingly, for East Anglia this is nearer 1.5% and the average house price here is now touching £180,000. Vince Cable thinks it’s a Property Bubble, Mark Carney doesn’t – we’ll see who’s right………….