Following on from my recent article
about the state of the Clacton property market and in particular what had
happened to the rents Clacton tenants have had to pay since the Credit Crunch,
if you recall, I said rents in Clacton are still 0.71% lower than
they were in 2008. A Clacton landlord has since rung me after reading the Clacton
Property Blog, wanting to know more of the story of what was happening to
current rents in the town. The reason he asked
was that his current agent hadn’t increased his rent for a number of years and
was concerned if he was getting the best return from his buy to let investment.
The Clacton rental market is all about supply and demand
(isn’t it so in all parts of the economy?). On the supply side, 60 rental
properties have come up for let in the last 31 days in Clacton. It sounds a lot
until you consider there are 4249 rental properties in Clacton, that means only
1.41% of the rental stock of properties in Clacton are coming onto the market each
month (it is normally around 5%). One
reason for this lack of new rental properties coming on the market is the fact
that tenants seem to be staying in properties longer.
With this lack of supply, newer tenants have to pay more to
secure the property they want. And
this is the crux of the matter ...properties
they want. Older properties in Clacton, that haven’t been maintained, still
retain their wood chip wallpaper from the 1970’s and thread bare carpets have
seen their rents drop. Tenants want either modern properties with all the
mod cons or older style properties that have been presented to an exceptional
standard – and they are prepared to pay for the privilege. Rents for top
quality properties in Clacton have risen by 0.4% in the last month. Any properties,
old or modern, put on the market in good or excellent condition will rent in a
matter of days.
Interestingly, looking at Clacton property values, the Land
Registry have just released their latest set of data on property values.
Throughout April 2015 (the latest set of data), property values rose in Clacton,
with 0.7% growth, meaning they are now 9.4% higher than they were a year ago. When one looks at the regional picture, the East
of England average property values rose by 0.3% in the last month. The
difference doesn't concern me, as the regional and local property values always
even themselves out over the months.
Looking forward, after considering all the statistics and
talking to other property professionals, I expect property values in Clacton to
rise by 3% to 5% over the coming 12 months, following the Conservative victory. In
a forthcoming article, I will discuss how the number of properties changing
hands each month has dropped considerably in the last 10 to 15 years in the town.
No comments:
Post a Comment