My thoughts
to the landlords and homeowners of Warrington…
The tightrope
of being a Warrington buy-to-let landlord is a balancing act many do well at.
Talking to several Warrington landlords, they are very conscious of their
tenants’ capacity and ability to pay the rent and their own need to raise rents
on their rental properties (as Government figure shows ‘real pay’ has dropped
1% in the last six months). Evidence does suggest many landlords feel more
assured than they were in the spring about pursuing higher rents on their
properties.
During the summer
months, historic evidence suggests that the rents new tenants have had to pay on
move in have increased. June/July/August is a time when renters like to move,
demand surges and the normal supply and demand seesaw mean tenants are normally
prepared to pay more to secure the property they want to live in, in the place
they want to be. This is particularly good news for Warrington landlords as
average Warrington rents have been on a downward trend recently. So look at the
figures here...
Rents in Warrington on average for new tenants moving in
have risen 1.4% for the month, taking overall annual Warrington rents 2.3%
higher for the year
However,
several Warrington landlords have expressed their apprehensions about a slowing
of the housing market in Warrington. I think this negativity may be exaggerated.
The other
side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Warrington as well as the Warrington buy-to-let
landlords). I believe the Warrington
property market has been trying to find some level of equilibrium since the New
Year. According to the Land Registry…
Property Values in Warrington are 3.08% higher than they
were 12 months ago, rising by 0.34% last month alone!
However, the
reality is the number of properties that are on the market in Warrington today has
dropped by 16.7% since the New Year and that will have an interesting effect on
short-term Warrington property values. As tenants have had less choice, buyers also
have less choice.
Be you a
homeowner or landlord, if you are planning to sell your Warrington property in
the short-term, it is crucial, that whilst you allow room for negotiation, you
must still realistically price your property when you bring it to the market.
Given that everyone now has
access to property details, including historic stats for how much property has
sold for, buyers will be more astute during the offer and negotiation stages of
a purchase.
Even with this short-term decrease
in the number of properties for sale in Warrington, property prices will remain
stable and strong in the medium to long term. This is because the number of
properties on the market today is still way below the peak of summer of 2008,
when there were 1,660 properties for sale compared to the current level of 441
(if you recall, prices dropped by nearly
20% in Credit Crunch years of ‘08 and ‘09).
Compared to 2008, today’s lower
supply of Warrington properties for sale will keep prices relatively high...and
they will continue to stay at these levels for the medium to long term.
Less people are moving than a few years ago, meaning less
property is for sale. Fewer properties for sale mean property prices remain
relatively high and this is because of a number of underlying reasons. Firstly,
buy-to-let landlords tend not sell their properties as often than owner-occupiers,
consequently removing the property out of the housing market selling cycle.
Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs
more to move). Next, there is a dearth of local authority rental housing so
demand for private rented housing will remain high. Then we have the UK’s
maturing owner occupier population, meaning these older people are less likely
to move (compared to when they were younger). Another reason is the lack of new
homes being built in the country (we need
240k houses a year to be built in the UK and we are currently only building
145k a year!) and finally, the new mortgage rules introduced in 2014 about
how much a person can borrow on a mortgage has curtailed demand.
Some final thought’s before I go – to all the Warrington
homeowners that aren’t planning to sell – this talk of price changes is
only on paper profit or loss. To those that are moving ... most people that
sell, are buyers as well, so as you might not get as much for yours, the one
you will want to buy won’t be as much, (swings and roundabouts as Mum used to
say!)
To all the Warrington landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Warrington Property Blog
For more thoughts on the Warrington Property Market, please visit the Warrington Property Market Blog.
You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.
Don't forget to visit the links below to view back dated deals and Warrington Property News.
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