Over the past few years, the UK rental market has experienced significant fluctuations, with rents increasing dramatically during the Covid-19 pandemic. Between 2020 and 2022, demand far exceeded supply, driving rents to unprecedented levels.
In the East
Midlands for example, the average rent has risen from £732 per calendar month
(PCM) to £1,016pcm YTD in 2024.
However, the
last 12 months have seen a slight increase in the number of properties
available for rent, both nationally and regionally, leading to a more balanced
market. This article will explore these trends and see if the same is happening
in Northampton.
National and Regional Trends in Buy-to-Let
Nationally,
the rental market has witnessed a notable shift in the last 12 months. During
the pandemic, many factors contributed to the surge in rental prices, including
the migration of people seeking more spacious living conditions and the
disruption of new housing developments. As restrictions eased, the rental market
gradually started to show signs of stabilisation. According to recent
statistics, there has been a slight uptick in the supply of rental properties
across the UK coming onto the market, which has helped to temper the rapid rise
in rents.
In April 2023, 87,592 UK rental properties came on to the
market. This number increased by 14.86% to 100,614 in April 2024.
Regionally,
the East Midlands mirrors this national trend where 5,349 rental properties
came on the market in April 2023. This increased to 6,310 rental properties in
April 2024, a rise of 17.9%.
In April 2023, the average rent achieved for a new UK rental
property was £1,641pcm. The average rent increased by 8% to £1,772pcm in April
2024.
A far cry from the national double digit percentage increases in the mid to late teens only 12/18 months before.
The East Midlands is slightly behind this national trend in rent increases. The average for those new properties that came on the market in April 2023 was £1,012pcm. This increased to £1,039pcm for those that came on the rental market in April 2024, a modest rise of 2.7%.
The increased
availability of rental properties has brought some relief to tenants, who had
been grappling with steep rent hikes of +20% per annum for some types of
properties. Despite this increase in supply, the demand for rental properties
remains robust, ensuring that rental yields continue to be attractive for
landlords.
The Northampton Rental Market
In Northampton, the rental market followed a similar trajectory in the post pandemic years of 2021/2, as rents surged due to a significant imbalance between supply and demand.
Therefore, let us look at the most recent Northampton statistics to see if that pattern has followed through to us.
In this analysis, we have looked at the first four months of 2023 versus the first four months of 2024. The reason we have done this is because if we were only to look at April of each of those years for Northampton, it would be such a small sample size that the results would not be ideal.
Therefore,
looking at the first four months of 2023, 1,611 rental properties came onto the
market in the Northampton area (NN1 to NN7) with an average rent of £1,028pcm.
In the first four
months of 2024, 1,899 Northampton properties have come onto the market for rent
and the average rent has been £1,101pcm, a rise in rent of 7.1%.
Why Northampton Buy-to-Let Remains a Strong Investment
Despite the recent market adjustments, Northampton remains a compelling investment opportunity for several reasons:
1. Strong Rental Demand: Northampton’s rental market continues to benefit from strong demand. The town's attractive location, good transport links, and quality of life make it a desirable place to live, ensuring a steady stream of potential tenants.
2. Affordable Property Prices: Compared to other regions, Northampton offers relatively affordable property prices. This affordability, combined with solid rental yields and long-term stable capital growth, makes it an appealing option for buy-to-let investors.
3. Economic Growth and Development: Northampton is experiencing economic growth, with ongoing developments in infrastructure and amenities. This growth not only enhances the quality of life for residents but also boosts the rental market by attracting more people to the area.
4. Long-Term
Investment Potential: The
recent stabilisation in the rental market suggests a move towards long-term
sustainability. For landlords, this means the potential for consistent rental
income and capital growth over time.
Addressing Northampton Tenant Concerns
It's
important to address the concerns of Northampton tenants who may feel burdened
by the recent rent increases. While it's true that rents have risen
significantly, it's worth noting that these increases have generally aligned
with inflation rates over the medium term (since 2016). This means that, in
real terms, the cost of renting has not increased disproportionately.
For tenants
in Northampton, the slight increase in rental supply offers a glimmer of hope.
A more balanced market could lead to more competitive rental prices and better
opportunities to find suitable housing. Landlords should be mindful of
maintaining good relationships with tenants, recognising the importance of fair
and transparent rental practices.
The Future of Buy-to-Let in Northampton
Looking ahead, the Northampton buy-to-let market appears poised for continued stability and growth. Landlords should take advantage of the current market conditions to expand their portfolios. The combination of strong demand, affordable property prices, and the town’s economic prospects make Northampton a smart investment choice.
For those considering entering the buy-to-let market, now is an opportune time. The national and regional stabilisation of rental prices indicates a mature and sustainable market, reducing the risks associated with volatility. By investing in Northampton, new landlords can benefit from the town's attractive rental yields and long-term house price growth potential.
As a property
agent, I like to stay informed about these trends and communicate them to
everyone interested in the Northampton property market. By highlighting the
town's potential investment opportunity for landlords whilst addressing tenant
concerns, we can foster a healthy and thriving rental market that benefits all
parties involved.
