It’s now been a good 12/18 months since annual
rental price inflation in Warrington peaked at 1.9%. Since then we have seen
increasingly more humble rent increases. In fact, in certain parts of the Warrington
rental market over the autumn, the rental market saw some slight falls in
rents. So, could this be the earliest indication that the trend of high rent
increases seen over the last few years, may now be starting to buck that trend?
Well, possibly in the short term, but in the coming
few years, it is my opinion Warrington rents will regain their upward trend and
continue to increase as demand for Warrington rental property will outstrip
supply, and this is why.
The only counterbalance to that improved rental growth
would be to meaningfully increase rental stock (i.e. the number of rental
properties in Warrington). However, because of the Government’s new taxes on
landlords being introduced between 2017 and 2021, that means buy-to-let has
(and will) be less attractive in the short term for certain types of landlords
(meaning less new properties will be bought to let out).
Interestingly, countless market experts assumed at
the start of 2017, that the number of rental properties would in fact drop throughout
the year. The assumption being as the new tax rules for landlords started to
kick in, landlords looked to kick their tenants out, sell up and invest their capital
elsewhere. (Although ironically that would lower supply of rental properties,
decreasing the supply, meaning rents would increase again!).
Anecdotal evidence suggests, confirmed by my
discussions with fellow property, accountancy and banking professionals in Warrington,
that Warrington landlords are (instead of
selling up on masse), actually either (1) re-mortgaging their Warrington
buy-to-let properties instead or (2) converting their rental portfolios into limited
companies to side step the new taxation rules.
The sentiment of many Warrington landlords is that
property has always weathered the many stock market crashes and runs in the
last 50 years. There is something inheritably understandable about bricks and
mortar – compared to the voodoo magic of the stock market and other exotic investment
vehicles like debentures and crypto-currency (e.g. BitCoin).
Remarkably, there is some good news for tenants, as
Tory’s recently published the draft
Tenants’ Fee Bill, which is designed to prohibit the charging of tenants
lettings fees on set up of the tenancy. However, looking at evidence in
Scotland, I expect rents to rise to compensate landlords, thus hammering
faithful tenants looking for long-term tenancy agreements the hardest. This
growth will be on top of any usual organic rent growth. It really is swings and roundabouts!
So, what does this all mean for landlords and
tenants in Warrington? In my considered opinion,
Rents
in Warrington over the next 5 years will rise by 9.3%, taking the average rent
for a Warrington property from £603 per month to £659 per month.
To put all that into perspective though, rents in Warrington
over the last 12 years have risen by 15.2%. In fact, that rise won’t be a
straight-line growth either, because I have to take into account the national
and local Warrington economy, demand and supply of rental property, interest
rates, Brexit and other external factors. Please see the graph
for my projections
In the past, making money from Warrington buy-to-let
property was as easy as falling off a log. But with these new tax rules, new
rental regulations and the overall changing dynamics of the Warrington property
market, as a Warrington landlord, you are going to need work smarter and have every
piece of information, advice and opinion to hand on the Warrington, Regional
and National property market’s, to enable you to continue to make money.
If you are a landlord who may have a void property over winter, then feel free to get in touch and let us at Hamlet Homes provide you with a fully reference checked and credit checked tenant in your property before the weather gets even colder, to ensure your property is protected.
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.
No comments:
Post a Comment