3rd April 2017
The next five years will see an interesting change in the Wolverhampton property market. Recent research has concluded that the rent private tenants pay in Wolverhampton will rise faster than Wolverhampton property prices over the next five years, creating further issues to Wolverhampton’s growing multitude of renters. The examination of statistics forecasts that ..
By 2022, Wolverhampton rents will increase by 22%, whereas Wolverhampton property values will only grow by 16%.
Over the last five years, property values in Wolverhampton have risen by 17.1%, whilst rents have only risen by 15.1%.
Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up, whilst the press predicted some landlords expect to reduce their portfolios in the next couple of years. This means Wolverhampton tenants will have fewer properties to choose from, which will push rents higher. Amongst property professionals in Wolverhampton, there appears to be privation and shortage of new rental properties coming on to the Wolverhampton lettings market.
Landlords have some intriguing challenges ahead of them in the coming years, most notably in that the Tories have changed the taxation rules for landlords in the way buy-to-let properties are to be taxed. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.
This seems to predicate an expectation on small private landlords to continue to house around a fifth of the population only to be heavily taxed for it, but landlords don't invest in buy-to-let to not make a profit. Something has to give – and that will be significant rent rises over the coming few years.
With the challenges ahead, house price inflation will be tempered over the coming five years in Wolverhampton, with current estimations being at a 16% rise. The number of properties on the market in Wolverhampton remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers.
Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Wolverhampton people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands (because they have no money), with the average rent for a Wolverhampton rental property currently standing at £543 per month ... the average rent in Wolverhampton could rise to £662 per month.
These are interesting times. There is still money to be made in buy to let in Wolverhampton – Wolverhampton landlords will just need to be smarter and more savvy with their investments.