Following on from my recent article
about the state of the Grantham property market and in particular what had
happened to the rents Grantham tenants have had to pay since the Credit Crunch,
if you recall, I said rents in Grantham are
still 4.86% lower than they were in 2008. A Grantham landlord
has since rung me after reading the Grantham Property Blog, wanting to know
more of the story of what was happening to current rents in the town. The reason he asked was that his current agent hadn’t
increased his rent for a number of years and was concerned if he was getting
the best return from his buy to let investment.
The Grantham rental market is all about supply and demand
(isn’t it so in all parts of the economy?). On the supply side, 103 rental
properties have come up for let in the last 31 days in Grantham. It sounds a lot
until you consider there are 3,375 rental properties in Grantham, that means only
3.05% of the rental stock of properties in Grantham are coming onto the market
each month (it is normally around 5%). One reason for this lack of new rental properties
coming on the market is the fact that tenants seem to be staying in properties
longer.
With this lack of supply, newer tenants have to pay more to
secure the property they want. And
this is the crux of the matter ...properties
they want. Older properties in Grantham, that haven’t been maintained, still
retain their wood chip wallpaper from the 1970’s and thread bare carpets have
seen their rents drop. Tenants want either modern properties with all the
mod cons or older style properties that have been presented to an exceptional
standard – and they are prepared to pay for the privilege. Rents for top
quality properties in Grantham have risen by 0.4% in the last month. Any properties,
old or modern, put on the market in good or excellent condition will rent in a
matter of days.
Interestingly, looking at Grantham property values, the Land
Registry have just released their latest set of data on property values.
Throughout April 2015 (the latest set of data), property values rose in Grantham,
with 1% growth, meaning they are now 4.3% higher than they were a year ago. When one looks at the regional picture, the East
Midlands average property values rose by 1.4% in the last month. The difference
doesn’t concern me, as the regional and local property values always even
themselves out over the months.
Looking forward, after considering all the statistics and
talking to other property professionals, I expect property values in Grantham
to rise by 3% to 5% over the coming 12 months, following the Conservative
victory. In a forthcoming article, I will discuss how the number of
properties changing hands each month has dropped considerably in the last 10 to
15 years in the town.
...And so back to our landlord. Each property is unique and
so as his tenancy agreement allows him to inspect the property with notice to
the tenant, we will be visiting the property next week. For more in depth thoughts and opinions like
this on the Grantham Property market ...visit the Grantham Property Blog http://granthampropertyblog.blogspot.co.uk/
