I recently read a report that highlighted the current plight of elderly tenants and the problems they are facing in today's rental market.
The article summed up the fact that the older generation are slowly being forced out of city centre and central town accommodation, to the surrounding, outskirts towns and villages. Elderly people have been driven out of British cities into the surrounding suburbs and villages more than in any other country in Europe, an official study shows. An analysis of the populations of urban areas across the European Union shows that the UK has by far the biggest divide along age lines between cities and the neighbouring areas. City centres have become described as virtual playgrounds for the young, who live, work and socialize in small areas of glass office blocks, executive apartments and chain bars.
The tendency for large traditional buildings being converted into smaller flats by landlords is also thought to be contributing to the movement of older people out of city centres.
Across Europe as a whole, retired people make up just over a quarter of the urban population, or 26.6 pensioners for every 100 people of typical working age. The highest ratio is in Frejus on the south coast of France, at 57.2 pensioners per 100 people of working age.
In Britain the figure varied widely between popular retirement hot spots on the coasts and cities with younger populations.
Waveney in Norfolk, has the highest proportion of pensioners, at 44 for every 100 workers, just ahead of Torbay with a ratio of 42.6. By contrast, in Manchester there are only 14.6 over-65s for every 100 working age people and in Slough the figure is just 14.7.
But when the proportion of pensioners in inner-city areas are contrasted with those in the surrounding areas, it shows a uniquely high concentration of older people in suburbs and surrounding villages.
With these statistics being highlighted in recent reports, i would like to carry out a comparison of property prices and rental prices within Shrewsbury Town Centre and surrounding areas, focusing specifically on one area that is very popular with the older generation - Church Stretton.
I would like to take two houses of similar rental price, one from the centre of Church Stretton and one from the centre of Shrewsbury, i will outline the property value, the value fluctuations over the past 5 years, yield percentages, estimated rental values and current rental amount achieved. By doing this i hope to highlight the reasons behind the trends mentioned in the report regarding elderly tenants being pushed out of city and town centre accommodation.
Shrewsbury - Castlefields
Castlefields is a residential area, 10 minutes walk from the centre of Shrewsbury, close to transport links and local amenities, favoured by families, particularly young families, but also those working full time in Shrewsbury town centre or further afield. The average property size is 2 - 3 bedroom town houses, terraced or semi detached with limited or no outside space.
The property i wish to highlight is located in Castlefields, it is a two bedroom, mid terraced house with off road parking and a small courtyard garden to the rear.
The current average estimated value of this property is £124,760, this property has experienced a steady increase in value over the course of the past five years. The same property has increased it's value by 5.9% (£6,937) in five years, we can take a closer look at the fluctuations in house prices by comparing average values over a five year period, taking the house in Castlefields as an example:
5 Years ago the same property was valued at - £117,823
2 Years ago - £114,860
1 Year ago - £122,293
3 Months ago - £120,517
The current rental amount of this particular property is £585 per month which gives the home owner a yield percentage of 5.6% which, for Shrewsbury, is not a bad yield percentage to achieve, it is around the average yield percentage for property this close to the town centre.
(Please remember that these are average, estimated values obtained from property marketing portals).
With it's central location and proximity to Shrewsbury transport links, the Castlefields area is a popular area for those working in or out of Shrewsbury town, there is also a close knit family feel with the area lending itself for easy access to local schools and leisure facilities. A property such as the one highlighted tends appeal to young, professional individuals/couples or younger, smaller families.
The current rental price for the property highlighted above, is £585 per month, for a two (double) bedroom, mid terraced house, in a central location, with small courtyard garden, allocated parking and large kitchen. This property would appeal to a professional couple or small family, requiring properties close to local amenities and transport.
The area i now wish to highlight is a small town just South of Shrewsbury, famed for it spectacular scenery and nestled into the Shropshire hills, Church Stretton is a firm favourite of an older generation. Providing a relaxed, quiet atmosphere, with good transport links to Shrewsbury and the South, it is slowly becoming recognised as a perfect family environment and a slightly younger generation are taking an interest in setting up home in this sleepy little town.
Having lived around Church Stretton my whole life i have experienced the constant change, from an "over looked" retirement destination, to a recognised, family friendly, rather beautiful place to both visit and live.
With the area being quiet and less likely to attract professional residents, the price of property is not necessarily less, but you do get more for your money (comparing similar sized properties in the centre of Shrewsbury as an example). The current value of the comparative property in Church Stretton is £199,494, for this you get a large three bedroom property, with garage, good sized garden, brand new bathroom suite, in a small, friendly rural location. As a brief comparison, the same sized property in the aforementioned Castlefields would have an average asking price of £220,338 with a rent amount of £750 which would give a total yield percentage of 4.1% (slightly below average for Shrewsbury).
The Church Stretton property, with a current value of £199, 494, has experienced a more extreme fluctuation in value over the past five years:
5 Years ago the same property was valued at - £186,865
3 Years ago - £187,478
1 Year ago - £193,703
3 Months ago - £193,816
With a current rental price of £525, giving a yield percentage of 3.1% which is a lot lower than the average yield percentage for Shrewsbury, however, what we have to remember is that the yield percentage in a town such as Church Stretton will always be lower due to the nature of the town and the type of tenant it will attract. What appeals to the older generation and families are the size of properties available, comparing the Castlefields and Church Stretton areas, it is clear that the larger sized properties and lower rent amounts attract long term tenants, to an area that lends itself to quiet retirement and/or family life.
What we must remember is that Church Stretton does appeal to a certain market, an older generation and families looking to settle for longer periods of time, this means more reliable tenants and longer contract periods. We have also discovered that Church Stretton properties are very sought after, with six back to back viewings in one afternoon, there is quite clearly a demand, from applicants of all ages. Buy to let investors could achieve a comfortable long - term income with property in areas that appeal to an older generation.
For more information regarding rental properties for Landlords and tenants, contact Martin & Co Shrewsbury on 01743340020. Shropshire's number 1 letting agent.