It certainly has been an interesting year in the Property Industry. Looking back we’ve had the June 2019 Tenant Fees Bill, impending changes to Anti Money Laundering Procedure for Agents, the announcement of the ban of Section 21 notice, threats of Rent Caps and mandatory 3 year tenancies and forcing landlords to sell their properties at a fraction of the price to their tenants, ongoing Brexit negotiations and delays and it’s not even over. We have a snap election next month.
If I’ve learned one thing in my time in this industry, it’s that Property and Politics do not mix. There are some industries that should be governed by a separate unitary organisation. Think back to the 80’s when the government were responsible for setting the Base Rates (now set at 0.75% by the Bank of England). At that time rates were as high as 15% in 1981 so you can only imagine how much one would be paying on a mortgage at that time. Admittedly, property prices were significantly cheaper back then but my point being that too much government intervention is likely to cause more harm than good.
If the government continue to squeeze the profitability out of the sector, the likelihood is we will see an exodus of landlords meaning less quality rental stock which can only mean an artificial inflation of rents. In keeping with last week’s article where I discussed how much rents had increased in York over the last twelve months, I wanted to look at the profile of properties and tenants in York.
Interestingly, the greatest number of properties to rent in York were flats which contributed to 39.7% of the York private rental market. The next was terraced houses which account for 38.8% of York properties let in the last 12 months which, when compared to the whole of Yorkshire and the Humber only came to 34.6%. Finally, semi-detached properties formed 15.6% of the York BTL market and lastly, detached properties contributing to only 5.9%.
It may come as no surprise that, detached houses, in general, achieve the highest rents, followed by semi-detached, terraced houses and finally flats and apartments. With the above chart in mind, simple demand and supply economics tells us that one could expect the greatest increase in rents to be from detached properties over the last year given these form the lowest proportion of properties.
This is certainly indicative of the graph below which shows that Detached York properties have seen a rent uplift of a staggering 13.8%. This was followed by terraced houses and flats which saw an increase of 6.68% & 6.37% respectively and lastly, but surprisingly semi-detached houses which only saw an increase of 5.66%.
What I will say is the York private rental market has certainly outperformed the rest of Yorkshire and the Humber which reported only a rent increase of 6.08% for detached properties, 1.67% for semi-detached properties, 1.57% for flats and 0.90% for terraced houses.
So, does that mean if you’re looking for properties to rent in York that you should only invest in detached properties? Well not necessarily. It’s really important if you consider the area in York you plan on investing in. I regularly see high end city centre apartments achieving greater rents than detached houses on the outskirts of York. If you need advice at all, you know how where to find me.