Chiswick Rental Market Has Gains For Both Landlord And Tenant
Blogger Andy Berthier analyses the local rental market of the past ten years
Back in the
Spring, there was a surge in Chiswick landlords buying buy to let property
in Chiswick as they tried to beat George Osborne’s new stamp duty changes
which kicked in on the 1st April 2016. To give you an idea of the sort
of numbers we are talking about, below are the property statistics for
sales either side of the deadline in W4.
Jan 2016 – 48 properties sold
Feb 2016 – 47 properties sold
March 2016 – 114 properties sold
April 2016 – 30 properties sold
May 2016 – 33 properties sold
Normally, the number of sales in the Spring months is very similar, irrespective
of the month. However, as one can see, this year was a completely different
picture as landlords moved their purchases forward to beat the stamp duty
increase. You would think that even with a basic knowledge of supply and
demand economics, rents would be affected in a downwards direction?
However,
there appears to be no apparent effect on the levels of rent being asked
in Chiswick - and more importantly achieved - and this direction of rents
is not likely to inverse any time soon, particularly as legislation planned
for 2017 might reduce rental stock and push property values ever upward.
The decline of buy to let mortgage interest tax relief will make some
properties lossmaking, forcing landlords to pass on costs to tenants in
the form of higher rents just to stay afloat. Even those who can still
operate may be deterred from making further investments, reducing rental
stock at a time of severe property shortage.
.. but it’s not all bad news for tenants. Whilst average rents in Chiswick
since 2005 have increased by 33.3%, inflation has been 38.5% over the
same time frame, meaning Chiswick tenants are 5.2% better off in real
terms when it comes to their rent (which is a sizeable chunk of most people’s
monthly household budgets.)
I found it particularly interesting looking at the rent rises over the
last five years in Chiswick, as it was five years ago we started to see
the very early green shoots of growth of the Chiswick economy. As a whole,
following the Credit crunch (2011), rents in Chiswick have risen by an
average of 3.6% a year – fascinating don’t you think?
The view I am trying to portray is that while renting is often portrayed
as the unfavorable alternative to home ownership, many young Chiswick
professionals like renting as it gives them adaptability with their life.
Rents will continue to rise which is good news for landlords as buy to
let is an investment but, as can be seen from the statistics, tenants
have also had a good deal with below inflation increases in rents in the
past. It’s a win-win situation for everyone although on a very personal
note, it’s imperative in the future that tenants are not thwarted from
saving for a deposit by excessive rental hikes – there has to be a balance
for everyone.
Andy Berthier
www.chiswickpropertyblog.co.uk
November 30, 2016