If you read the weekend newspapers, pay attention to the property media, or live in London(!), you're probably used to hearing that rental prices are increasing. I get phone calls every now and then from landlords who have done just that, and want to know when their 15% rental increase is going to happen in Northampton or Rugby.
One of the benefits of owning a franchise is that I get to hear what's happening elsewhere in the UK on an impartial basis - there are around 140 Belvoir's and we all feed into the 'Belvoir Rental Index' which tells us what's really going on! The main message coming out of this is that rental increases and decreases take place on a regional, not a national basis. I have colleagues in London who genuinely have seen rents rise 20% in recent years. I have other colleagues who, even in this market, have more properties than tenants, which holds prices down. And then there's the majority who, like myself, have seen some small rental increase, but not on the scale the media would have us believe.
So what is happening in Rugby and Northampton with rental prices?
Rugby
The smaller of the 2 towns, it's easier to generalise about prices in Rugby. For the most part they are up - probably about 8-10% on 2 years ago. This applies pretty much across the town for all 1 - 3 bedroom properties that aren't falling to bits! It's good news for landlords.
The exception is larger properties - 4 and 5 bedrooms. There have been a lot of these built in Rugby in the last 10 years, and it's these properties that people can't sell (because of what they paid to buy) so they look to let them instead. The result is an oversupply of larger properties on the rental market and a subsequent reduction in rental prices - achieving over £1000PCM at the moment for any property built in the last 10 years would constitute a good day at the office. At the top end, I'd say rental prices have fallen by as much as 20%.
Northampton
Being larger, the Northampton market is more complex. In terms of 1 and 2 bed properties, there has been little change, mainly due to a constant supply of available units due to large scale development in recent years. This particularly applies to apartments - price increases simply haven't happened despite the so called rental boom. At the top end of the market it's the same as in Rugby - oversupply leading to reduced rental prices. The scale of reduction is less in Northampton - maybe 10% instead of 20% but the general theme is still there. The exception comes with 3 bed properties - the family market, which has seen a steady increase in recent months. Areas like Hunsbury and Duston always rent well, but the inability of families to buy a house means they are prepared to pay more to rent there (good schools etc), so prices increase - a staple 3 bed in either area which used to rent for £650 is now likely to get £700PCM. The other change has been in the poorer areas of town where quite massive demand from the Local Authority for private sector housing means that £575 can be guaranteed for any 3 bed property. In some areas you can buy one for £80k, and in these areas clearly the number of rental properties is increasing as landlords flock in! With a waiting list of 4000 properties, there's little chance of supply outstripping demand though.
