The opening of the new Amazon building in Dunstable a couple of weeks ago has resulted in a stream of tenants looking for local accommodation and has resulted in a very busy period of viewings and of course discussions with the tenants unused to the UK rental market to explain the whole rental process.
Most of the tenants are single or young couples from Europe looking for studios or 1 bedroom apartments and unaware that they will be required to pay for their utilities and council tax as well as the rent resulting in them having to reassess their budgets.
The amount of single tenants now moving to the area for work would seem to have created a new possibility for HMO’s (House of Multiple Occupancy) and also the opportunity for owners to rent out a spare room to lodgers. Lodgers were common when I was growing up and we had a Bus Driver who rented a room in our house for many years. This was one way of making ends meet at that time.
HMO’s are common in Luton where there is a demand for this type of shared house, but previously there wasn’t a requirement in Dunstable. This is now changing and I know of a few landlords who now have licensed HMO’s in Dunstable and are adding to them. We are also hearing from investors who haven’t considered Dunstable for its HMO potential befor, but they are now investigating this market. This isn’t every landlord’s ideal investment with greater upfront costs to make them compliant, the need for furniture, the extra management of the property and often the relationships of the tenants to manage, but the returns can be far greater than having a single let.
The rental values of studio apartments in Dunstable have shot up by 25% from 2012-2016 where during the same period studio apartments in Leighton Buzzard had only increased by 6%. These studio apartments would have been difficult to find tenants for 3 years ago, but with the demand we are now seeing we are recommending our landlords smarten them up to attract the right tenants.
2 bedroom apartments are still popular having always been the most sought after but studio’s and 1 bedroom apartments have seen a much greater demand recently. Larger family 3 & 4 bedroom houses are seeing less demand. The prices being asked for by some landlords & agents is more than the local market should be expected to pay and the result is many 3 & 4 bedroom properties left empty for months and the loss of a sizable rental income.
It is easy for an agent to value a 3 bedroom house at £1300 or even £1400pcm to gain an instruction if the landlord is going to base their choice on the highest valuation, but if that agent then fails to achieve that price and the property is empty for a few months the loss of income is much greater then asking a reasonable rental price and having your choice of tenant.
