Last month was one of the busiest we have experienced in our 7+ years in Norwich. Looking at the number of tenant applications currently being progressed, September is looking pretty good too.
However, it’s still the case, in Norwich at least, rental levels are remaining fairly static. Across our portfolio of managed properties, our average is holding firm at £715 pcm although, encouragingly, within the 2 bedroom house segment of that, there has been some upward movement in the last couple of months. This compares with the recently published Homelet Rental Index for July which shows average rents across the East Anglia region at £830 pcm which was up 6.3% on the month and up a whopping 9.4% from the same time a year ago. So, why the big variance between Norwich and the rest of the region? The simple answer is the greater East Anglia region as defined by Homelet takes into account places such as Cambridge and Bury St Edmunds, both extremely high rental areas. By way of example, our colleagues who own the Cambridge office of Martin & Co are currently advertising a 1 bed flat close to the railway station at £1,100 pcm whereas the same property type with parking, adjacent to Norwich station, would achieve around half of that.
The sales market for Buy To Let property definitely slowed off in August in line with the rest of the sales market as the last of the summer holidays were being enjoyed. Fewer buyers led to a flattening of prices and it’ll be interesting to see if the market takes off again during the autumn season, or whether the threat of a rise in mortgage interest rates continues to slake the appetite. Nonetheless anecdotal evidence suggests there are plenty of mortgage lenders out there willing to lend to buy to let investors offering them an increasing array of mortgage products.
Rightly or wrongly the Buy To Let market is being blamed for the inability of would be first time buyers being able to get onto the housing ladder but, if true, this isn’t a new phenomena. Buy-to-let as a term was first coined in 1995 as a marketing badge for a finance initiative launched that year although this type of lending had existed for a number of years previously. And, over the past thirteen years, the number of households in the private rented sector in England and Wales has climbed from 1.9 million to 3.6 million, an increase of 89.5%. The total number of people living in privately rented homes is now estimated at around 9 million. This means, for the first time, the number of private renters has now surpassed those in social housing.
Don’t be surprised then to see the whole lettings, buy to let, rental industry become more and more of a political football over the coming years.
For more information contact us at Martin & Co Norwich on 01603 766860.