Earlier this week one of our overseas landlords with a portfolio of properties in various areas of the UK called in to my shop in Dunstable. He is looking for further properties to buy as some of his investments are maturing and he has decided that property continues to be a good choice based on the returns he is currently receiving.
We discussed how the rental prices of all property types in Dunstable and Houghton Regis have increased substantially in the last 12 months and I carried out some research for him to show how his various properties had performed which also seemed to be a good opportunity to carry out an assessment of the most popular and in demand property types.
The graph shown and the figures in the table show that prices had been fairly steady until 2014 when they began to increase and have in the last year shown a marked jump in asking rents. Over the time from 2014 to 2016 most property had seen their asking rents increase by 25%, but 3 bedroom semi-detached houses have seen an increase of nearly 30%.
Having looked deeper into the number of properties available for rent each year and my experience and knowledge from talking to tenants it became obvious that there are a number of key factors:
- The number of available properties has decreased whilst the number of renters has increased. In 2012 there were 94 two bedroom terraced houses on the market but in 2015 there were only 42, half the number. For 3 bedroom semi-detached houses there were 58 available in 2012 but only 38 in 2015.
- There are more renters from London and towns such as St Albans and Hemel Hempstead moving to Dunstable as it is more affordable.
- Big companies such as Amazon who have chosen to locate in Dunstable have put more demand on rental properties as they attract more workers to the area.
- More tenants are staying in their properties for longer. The total number of rental properties will have increased but instead of moving after 12-18 months it is not unusual for tenants to stay in their properties for up to 3 years.
- Many families are now in a 2nd relationship meaning there is more need for a bigger property for children from both sides of previous relationships to stay.
- And obviously as demand from London buyers pushes up the house prices in the local area less are able to afford to buy the property they want, decide they would rather rent which is seen as acceptable choice today or don’t wish to commit to an area when their work choices in the future might require them to relocate.
Having taken a walk around the town to show him the number of shops that had opened recently, the businesses now in the White Lion Retail Park and the Woodside Industrial Estate he then insisted on a bus ride into Luton on the Busway to see how quick the connection was to Luton and the airport. He was interested to see how feasible it was for a London commuter to live in Dunstable however we have found recently that the local workforce has grown as companies locate or grow their existing premises.
Like most of our landlords he believes in providing good quality well maintained rental accommodation and is now looking to add to his portfolio in Dunstable or Houghton Regis. Having been impressed by what he had seen I am now tasked with finding his next investment purchases that will attract good quality reliable tenants who will also care for the accommodation he is providing.
