Average Rent Paid by Tenants in Stamford Rise to £839pcm

Back in the spring, there was a surge in landlords purchasing buy-to-let as they tried to beat George Osborne’s new stamp duty changes deadline on the 1^st April 2016.

To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in PE9.
 

Jan 2016:      41 properties sold

Feb 2016:      36 properties sold

March 2016:  79 properties sold

April 2016:     23 properties sold

May 2016:      42 properties sold

Normally, the number of sales in the spring months is very similar, irrespective of the month.  However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase.  You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in Stamford - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward.

The decline of buy-to-let mortgage interest tax relief will make some properties loss-making, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat.  Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

It's worth noting that it’s not all bad news for tenants.  Whilst average rents in Stamford since 2005 have increased by 14.5%, inflation has been 38.5% over the same time frame, meaning Stamford tenants are 24% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets).

I found it particularly interesting looking at the rent rises over the last 5 years in Stamford, as it was at that time we started to see the very early green shoots of growth of the Stamford economy.  As a whole, following 2011’s 'Credit Crunch', rents in Stamford have risen by an average of 1.6% a year.

The view I am trying to portray is that while renting is often portrayed as the unfavorable alternative to home ownership, many young Stamford professionals like renting as it gives them adaptability with their life.  Rents will continue to rise which is good news for landlords as buy-to-let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past.  It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

I like to keep a close eye on the local property market on a daily basis because it enables me to give the best advice and opinion. If you want to learn more about the Rutland and Stamford property market, feel free to pop in for a coffee at our office for a chat with me.

UPP Property Agents - For professional advice on buying, selling, renting and managing your homes and property investments.

David Crooke
Owner

 

SALES & LETTING AGENTS
Understanding People & Property

Email: david@upp-property.co.uk

Stamford: 01780 484 554      Oakham: 01572 725 825