It is the time of year when we can look at how property prices in 2016 fared in comparison to the decade preceding it. With property price data still to come through for the end of the year, our estimates paint a promising picture. The average flat price increased by 1.3% to £88,100 and the average house price increased by 2.5% to £163,700 versus 2015 prices.
The PRS (Private Rental Sector) in the UK has grown considerably in both size and importance over the last five years and is now worth a staggering £1.29 trillion. To contextualise, that is 1.29 million stacks of pound coins, with each stack being a million coins high. The PRS now makes up 18% of the housing stock in England alone and is expected to rise to more than a third by 2032.
Because of this rampant growth, it is no surprise to see that 17.7% of homes in Stockport are privately rented, which is encouraging for private landlords and would-be investors. Even homeowners have something to think about, as they may be tempted to turn the family home into a source of income, or indeed use their pension pot to become a landlord.
A decade ago, buying a home was a very different experience. Post-credit crunch the landscape in Stockport has changed, with many younger people unable to buy their own homes due to house price growth outpacing wages. This has made it both logical and practical for many people to rent, choosing between renting privately or using the options available from the local housing association.
I have found an interesting article on Property Industry Eye which I believe may be of some interest to those currently renting or whom are looking to rent to over the coming year.
Rightmove is forecasting asking price rents to rise 4% outside London this year.
Last year, the portal says asking price rents rose 3% outside London but fell 4.4% inside the capital.
The highest growth was recorded in the northern regions of Yorkshire & the Humber and the north-west; however, with the exception of London, all regions recorded a rise.
In inner London, rents fell by 5.2% while there was a smaller drop of 2.5% in outer London.
Rightmove’s head of lettings Sam Mitchell said of the 2017 market: “This year will be one of caution for buy-to-let investors due to tighter lending criteria and increased Stamp Duty.
“We definitely won’t see the spike in Q1 purchases that we saw last year as landlords rushed to buy before last April’s new Stamp Duty deadline.
“If the tax changes being phased in from this April lead to even fewer buy-to-let purchases and some landlords deciding to sell, then a tightening of supply in some areas will lead to increasing rents.
“We forecast that asking rents could rise by 4% outside London by the end of 2017, though in London prices are likely to stay flat.”
He added: “Investors looking for the strongest yields could consider investing in certain areas in the north-west where both demand and yields are high.
“Those with a number of properties in the capital may find that tenants are more price sensitive, so setting realistic rent levels will be the key to avoiding void periods.
“In order to mitigate this, we would recommend landlords asking for longer tenancies to help secure a steady rental income over the next few years while they adjust to what the tax changes will mean for them.”
Whether it’s urban living in the Town Centre or enjoying the rich mix of housing in the suburbs, Stockport is fast becoming a hotspot and was voted the happiest place in the North West by Rightmove.
Julian Wadden, the respected South Manchester Estate Agent, opens their doors in Stockport Exchange tomorrow, in what must be the most high profile and exciting location in town.
Andrew Smirthwaite, who heads up the latest branch commented “Stockport is fast becoming the next property hotspot, first time buyers, landlords and families alike are being drawn by the huge investment and regeneration of the centre, the wealth of cultural and heritage attractions, and the educational and sporting facilities. Not only has Stockport attracted some of the country’s biggest companies but also has its unique local character and independent retailers.”
There is definitely a buzz and energy about the area with a thriving community; many places to eat, an historic Old Town, great shopping, The Plaza and two new large retail developments that will completely change the landscape of The Centre. As well as a must go to location for ‘Foodies’ in South Manchester.
To celebrate the opening Julian Wadden are offering to sell or let your property for FREE in SK1, SK2 and SK3 which they envisage will save both sellers and landlords literally thousands of pounds. It’s on us! Visit www.julianwadden.co.uk/sellorletforfree
Andrew encourages anyone who is thinking of selling, or letting or has been less than satisfied with another agent, in SK1, SK2, SK3 to drop in, say hello and meet him and his team.
I’d like to introduce myself – I’m Gemma Francis and am delighted to have joined Julian Wadden Stockport Exchange as Lettings Manager. I have a lot of experience to bring to the team, having previously worked for Estate Agents Marsh & Parsons Ltd in London. I’ve worked within the industry for 3 and half years and am excited to immerse myself in the Stockport lettings market.
If you’d like to get in touch for anything property related, don’t hesitate to call on 0161 474 8668 or email me at firstname.lastname@example.org. I’d love to hear from you!
Rents due to rise as those fees passed to Landlords
Landlords won’t be worse off – and neither will tenants or agents
With our new Chancellor of the Exchequer revealing a ban on tenant fees in his first Autumn Statement on Wednesday what does this actually mean for Stockport tenants and Stockport landlords?
The private rental sector in Stockport forms an important part of the Stockport housing market and the engagement from the chancellor in Wednesday’s Autumn Statement is a welcome sign that it is recognised as such. I have long supported the regulation of lettings agents which will ensconce and cement best practice across the rental industry and, I believe that measures to improve the situation of tenants should be introduced in a way that supports the growing professionalism of the sector. Over the last few years, there has been an increasing number of regulations and legislation governing private renting and it is important that the role of qualified, well trained and regulated lettings agents is understood.
Great News for Stockport Tenants
So, let’s look at tenants … this is great news for them, isn’t it? Well before you all crack open the Prosecco, read this …
Although I can see prohibiting letting agent fees being welcomed by Stockport tenants, at least in the short term, they won’t realise that it will rebound back on them.
First up, it will take between 12 and 18 months to ban fees, as consultation needs to take place, then it will take an Act of Parliament to implement the change. A prohibition on agent fees may preclude tenants from receiving an invoice at the start of the tenancy, but the unescapable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents.
Published at the same time as the Autumn Statement, hidden in the Office for Budget Responsibility’s Economic and Fiscal Outlook on the Autumn Statement (The Office for Budget Responsibility being created by Government in 2010 to provide independent and authoritative analysis of the UK’s public finances), it said on Wednesday …
“The Government has also announced its intention to ban additional fees charged by private letting agents. Specific details about timing and implementation remain outstanding, so we have not adjusted our forecast. Nevertheless, it is possible that a ban on fees would be passed through to higher private rents”
The charity Shelter and Scotland
Scotland banned Letting Fees in 2012. The charity Shelter have been a big voice in persuading and lobbying the Government since it managed to persuade the Scottish Parliament to ban fees in 2012. On all the TV and radio shows at the moment, they keep talking about their Independent Research, which they said showed that,
“renters, landlords and the industry as a whole had benefited from banning fees to renters in Scotland. It found that any negative side-effects of clarifying the ban on fees to renters in Scotland have been minimal for letting agencies, landlords and renters, and the sector remains healthy.”
“Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees”
.. yet the devil is in the detail….
Only yesterday Shelter were quoting this Research from December 2013 to say rents never went up following the tenant fee ban in Q4 2012. I have read that research and I agree with that research, but it was published three years ago, only 12 months after the ban was put into place.
I find it strange they don’t seem to mention what has happened to rents in Scotland in 2014, 2015 and 2016…because that tells us a completely different story!
What really happened in Scotland to rents?
I have carried out my research up to the end of Q3 2016 and this is the evidence I have found;
In Scotland, rents have risen, according the CityLets Index by 15.3% between Q4 2012 and today
(CityLets being the equivalent of Rightmove North of the Border – so they know their stuff and have plenty of comparable evidence to back up their numbers).
When I compared the same time frame, using Office of National Statistics figures for the English Regions between 2012 and 2016, this is what has happened to rents
North East 2.17% increase
North West 2.43% increase
Yorkshire and The Humber 3.21% increase
East Midlands 5.92% increase
West Midlands 5.52% increase
East of England 7.07% increase
South West 5.82% increase
South East 8.26% increase
London 10.55% increase
….and let me remind you about Scotland … 15.3% increase.
Are you really telling me the Scottish economy has outstripped London’s over the last 4 years? Is anyone suggesting Scottish wages and the Scottish Economy have boomed to such an extent in the last 4 years they are now the Powerhouse of the UK? Because if they had, Nicola Sturgeon would have driven down the A1 within a blink of an eye, to demand immediate Independence.
So what will happen in the Stockport Rental Market in the Short term?
Well nothing will happen in the next 12 to 18 months … its business as usual!
… and the long term?
Rents will increase as the fees tenants have previously paid will be passed onto Landlords in the coming few years. Not immediately, but they will.