In the latter half of the 20th Century, you left school, got a job, bought a small house and kept buying and selling property, constantly upgrading, until eventually they carried you out in a box. However, the perceived shame and stigma of renting is no longer the case, as it seems the British are now beginning to accept this flexible lifestyle. This is a very important consideration for both Rutland homeowners and Rutland landlords, as it will transform the way the Rutland property ladders looks in the future, and I might ask, whether or not it will exist at all for some people?
The make-up of households is one important factor, especially in the Rutland property market. The normal stereotypical married couple, 2 kids & dog of the 1970’s & 80’s has changed. Increasingly we have the need for larger houses where two families come together after divorce (plus kids), & need a property to house everyone, through to an increase in the number of one person households.
Looking at the data for Rutland, of the 1,741 private rental properties in the Rutland County Council area, 34.69% are 1 person households. However, when we compare the number of 1 person Rutland households who have bought their own property with a mortgage, of the 10,556 owner occupied households in the area, only 5.77% are 1 person households. Compared to a decade ago, this explosion in demand for decent high quality rental properties that 1 person households require has not been met with an increase in supply of such properties. Increasingly I believe Rutland landlords need to consider this change in the make-up of Rutland households, as I see an opportunity here. Another interesting stat’ was that 13.84% of those 1,741 rental properties are lone parent households as well. Again, another opportunity for landlords!
The government’s introduction in 2013 of the ‘Help to Buy Scheme’, where first time buyers only needed a 5% deposit, changed the perception of people’s ability to buy without having to save for a huge deposit. However, it might surprise you that 95% mortgages were re-introduced within 6 months of the ‘credit crunch’ in late 2009. So again, it comes down to people’s own perception. Many youngsters think they won’t get a mortgage, so don’t even bother trying.
Coming back to the deposit, it is still a fact that once you start renting, it becomes much harder to save for a deposit, regardless of the size. Interestingly, 86% of the renters polled by the Halifax refuse to sacrifice the quality of accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit. This is the real reason why people aren’t buying – but renting. And, why demand for renting will continue to grow in the future (great news for landlords).
Rutland tenants can upgrade the quality & size of the property they live in for a minimum rent increase. The average rent of a 2 bed property in Rutland is £525pcm, a 3 bed is £170 more at £695pcm, whilst the average 4 bed is £995pcm. If you had to make that jump when buying, the monthly mortgage payments would be stratospherically higher. Without any social pressure & with better quality rental properties compared to a decade ago, we will become a nation of renters within the next generation. The UK is becoming more like our European neighbours, where renting is ‘the norm’. Who is going to supply all these properties to rent? Landlords!
Whether you are an existing landlord looking to grow your portfolio, or looking to become a ‘first time landlord’, my thoughts are to take advice from as many people as possible.
As the majority of landlords buy their 'Buy-to-Let' properties in the same town as where they live, you might need specific advice about Rutland itself.
Please call me to arrange an appointment at either my Rutland or Stamford office and I will be happy to assist you.
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