With Easter just gone and considering we are a quarter of the way through 2015, I was talking to landlord from Little Clacton the other day about what is happening to the level of rents that are being achieved in the Clacton property market.
In terms of rents in Clacton, it appears that rents being achieved for new rentals (ie
when the tenant moves out and new tenant moves in) have risen in the order of 3.8%
in the last 12 months on top of the range modern properties, yet remained
static for older Victorian terraced houses and converted apartments. However,
landlords with existing sitting tenants, irrespective of age are not increasing
their rents, as most landlords prefer to keep their existing tenant paying the
same rent and have the peace of mind that their tenant remains, paying the rent
(thus reducing the risk of a void period).
It must be remembered
rents dropped by 2% over 2008/9, due to oversupply in the rental market in
2009.) A lot of the people who couldn't sell their property in Clacton 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 Clacton
dropped by 58.5% between November 2007 and April 2010, a lot of which came on
to the rental market in Clacton. However, looking at the longer term though,
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.
The fact a number
of landlords are looking to sell their rental properties in the coming months,
as the property market in Clacton has improved. This further compounded as
tenants in existing rental properties appear to be staying in properties for
longer periods of time. Looking at the rents charged in Clacton,
historic evidence in the UK suggests private market rents have moved in line
with general inflation. Government figures only go back as far as the year
2000, but looking at other countries with similar housing markets (America,
Australia, Ireland and Holland) the fact is rents paid by tenants tend to rise
in line or just ahead of inflation.
As short term wage growth in Clacton has eased off recently,
rising by only 1.3% in the last 12 months, taking average salaries in Clacton
to £23,784 pa, with the tax breaks announced by The Chancellor in the Budget, I
believe, 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 Clacton property market,
pop in for a coffee or email me on craigdavis@moreestateagents.co.uk
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