Our Quarter 3 index is the first to be released since the country voted to leave the European Union and despite uncertainty, the market continues to thrive. On the release of the latest index, our Chief Operating Officer, Dorian Gonsalves said “This is Belvoir’s first post-Brexit rental index and the results, together with a survey of our franchise owners, confirm that the market that Belvoir is involved in, which consists of good quality rental accommodation, is currently quite stable,”
Across the country, we have seen that whilst rents increased slightly in Q3, they didn’t rise as significantly as we saw in the same time frame last year. Our index reports that house rents fared better than flats and apartments, with demand for larger properties increasing at 88% of our offices, and rent on four and five-bed homes increasing by between £25 and £50 when compared to the previous quarter.
“When we looked at expectations of rental increases or decreases during the next quarter, nobody is expecting a massive change in the run up to Christmas. Historically Q2 and Q3 tend to show an increase and Q4 tends to be when there might be a decrease, as landlords don’t want properties to be left vacant at this time of year and so it is an opportunity for tenants to pick up a bargain” says Dorian.
Analysis into stock shortages shows that two and three-bed houses remain in short supply, a staggering 81% of offices reported that they needed more 3-bed semi/terraced houses to fulfil demand whilst some offices reported oversupply of flats. It’s important as an investor that you get the very best advice from a reputable agent such as Belvoir to ensure you’re making the right investments to improve the demand for your property.
Comment from Dorian
“Much of Belvoir’s data is helping to dispel the myth that the only people who are renting are those who cannot afford to buy. Because of the last government’s shift in policy away from home ownership and the lack of houses being built, there is now an urgent need for more housing for students, migrants, labourers who are moving to new areas for jobs, and professionals with families who require four to five bedroom accommodation and view renting as a better option.
“2015 and 2016 are the first years since the recession where wages have been increasing faster than inflation; a situation that is likely to continue until the end of the year. However, there is no doubt that Brexit will result in an increase in inflation next year and when this happens, as it did during the recession, it will hit people’s pockets.
“When people are not experiencing wage growth and have less cash in their pockets, landlords in some areas are going to find themselves in a difficult position as they will be incurring tax increases, but will struggle to increase rents to cover this because we know that rental increases can only be in line with wages. This is something that we hope the Government will listen to, and take steps to address.
“If there is no reversal in government policy with regards to mortgage relief taxation, and no measures are introduced to increase the supply of rental properties then landlords are likely to come under increasing pressure to raise rents. If they subsequently start selling off properties, this will clearly have a negative effect on the availability of good quality accommodation. We await the Chancellor’s Autumn Statement on 23rd November with great interest.”
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