The
next five years will see an interesting change in
the Canterbury property market. My
recent research has concluded that
the rent private tenants pay in Canterbury will rise
faster than Canterbury property prices over the next five years, creating further issues to Canterbury's growing multitude of
renters. In fact, my examination of statistics forecasts that
...
By
2022, Canterbury rents will increase by 23%, whereas Canterbury property
values will only grow by 16%.
Let
me explain why I have come to those conclusions:
Over
the last five years, property values in Canterbury have risen
by 43% whilst rents have only risen by 9.4%.
Throughout the
last few years, and compounded in 2016, tenant demand for
rental properties continued to go up whilst the Press predicted some
landlords expect to reduce their portfolios in the next couple
of years, meaning Canterbury tenants will have fewer properties
to choose from, which will push rents higher. In fact, talking
to fellow property professionals in Canterbury, there appears to be a
shortage of new rental properties coming on to
the Canterbury lettings market.
Landlords
have some intriguing challenges ahead of them in the coming years most
notably in that the Tory’s have changed the taxation rules for
landlords in the way buy to let properties are to
be taxed. On top of that, there is the ban on letting agent
fees which is still to come into force (probably in 2018).
When that happened in Scotland in 2012, Scottish letting agents
passed on those fees to their landlords, who in turn
increased the rent they charged to their tenants.
All
I would say to Theresa May and Philip Hammond is that they must
be wary about indicating both red and green
lights at the same time to the private rented sector. They can’t
expect the armies of small private landlords to continue to house around a
fifth of the population and then tax the hell out of them. They didn’t invest
in buy to let as a charity or to satisfy any philanthropic urges. Something has
to give – and that will be significant rent rises over the coming few
years (and before anyone gives me any derogatory comments about
landlords … if it wasn’t for landlords buying all these buy to
let properties over the last 15 years, I am not sure where everyone would
be living today – because most the Council houses were sold off in
the 1980’s!).
With
the challenges ahead, with the ‘B’ word (that’s budget if
you wondered!), house price inflation will be tempered over the coming five
years in Canterbury. As I have discussed in previous articles,
the number of properties on the
market in Canterbury remains close to historic lows, which
is both good as it keeps houses prices relatively stable, yet not so good as it
impedes choice for buyers… and hence why I believe property values
in Canterbury will only be 16% higher in five years’ time.
Whilst on
the other side of the coin, with the challenges facing
landlords and the significant shortage of new homes being
built, Canterbury people still need somewhere to live. If those
people aren’t buying houses and the local authority aren’t building council
houses in there thousands (because they have no money), with
the average rent for a Canterbury rental property
currently standing at £1,318 per month …
Over
the next five years, I predict the average rent in Canterbury will
rise to £1,621 per month
These
are interesting times. There is still money to be made in buy to let
in Canterbury – Canterbury landlords
will just need to be smarter and more savvy with their
investments. If you are looking for such advice and opinion to help you meet
those investment goals, please get in touch.
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