Rental Market Report - September 2014

Update:  We've moved our blog to www.folkestone-estateagent.co.uk

Lettings Market Report - September 2014

 

There's been a rather interesting development in the market recently which I'd like to share with you.

In the last few months there's been a significant shift in the balance between supply and demand in the lettings market. 

The number of available quality properties has dropped and the demand from tenants has risen considerably. The most likely explanation for this shift is that landlords who have been waiting to sell their properties have now been released from the market and an imbalance is being felt as a result. i.e. too many prospective tenants and not enough properties.  We've also noticed that there has been a rise in achievable rents for properties in high demand areas.

What Does This Mean For Landlords?

Put simply this means that rents are rising, and it's a good thing too since interest rates will be on the up at the end of the year.  However it is still important to take the usual steps to make your property as attractive as possible to prospective tenants, when preparing it for a relet, or they won't be tempted to make the move.

The other thing we've noticed is a rash of existing tenants handing in their notice and then retracting it again after about a week.  They appear to have noticed the rising rents and lack of supply and are batoning down the hatches until they feel it's safe to come out again.  So, as always with supply and demand, over-enthusiastic pricing can stall the market so consider comparable properties on the market before setting your price. (or give us a call!)

My Tenant Has Just Handed in Their Notice - Should I Wait to See if They're Leaving?

No, definitely not!  We're very happy to get your property on the market for you and liaise with your tenant for viewings and we'll soon find out if they're serious about moving.  If they don't move, then we'll be ready to get it on the market again quickly when they do. This way you won't have lost any time in finding a new tenant.

What Kind of Rent Increase Might I Be Expecting?
This varies per property, so give us a call and we'll give you an idea of the kind of rents we've been achieving for properties like yours in the last few months - you might be pleasantly surprised.  Call 01303 212797 and ask to speak to either myself or Tracey Horton, our Branch Manager.


Rachel Roodhardt
Client Liaison Manager
Martin & Co Folkestone.

Have You Future Proofed Your Investments Against Rises in Interest Rates?

Update:  We've moved our blog to www.folkestone-estateagent.co.uk


After five years of enjoying the rewards of low interest rates and cheap properties it's time to take stock and future proof our investments.
 

The general view in the city is that The Bank of England will have raised interest rates by January 2015 or earlier, although no one seems to be expecting a dramatic hike in interest rates, rather a steady, gradual increase towards a specific goal.

So what does that mean?  Well no-one except Mark Carney knows for sure but we can speculate a little based on what the Bank of England has been telling us so far.

A year ago the BoE said that they would not raise the rates until unemployment dropped below 7% (currently 6.4% at the time of writing)

Only a few days ago at a BoE press conference Mark Carney said, "sustained economic momentum is looking more assured" and that future interest rate rises were likely to be "gradual and limited increase".

 

Furthermore, Carney said that the "normal interest rates of tomorrow are likely to be lower than those of yesteryear". Replying to a question from Sky's Ed Conway, Carney said market expectations of future rate rises were consistent with a change that would be gradual and limited.

What does "Lower Than Yesteryear" Mean?

One would expect that he's referring to rates experienced only in the last fifteen years where the pre-market collapse figure stood at just shy of 6%.

This is further supported by the BoE's forecasts issued on the 1st August:

0.83% in one year
1.35% in two years
2.18% in five years

Although we've also heard 2.5% quoted as a projected rate in five year's time.

Could these predictions be wrong?  Of course, there are many schools of thought, but Bank of England predictions are as close as you're going to get to a crystal ball.


Planning for Interest Rate Rises.

Take a look at the margin you're currently making on your investment properties and make a financial projection for each one to see what the inpact of rising interest rates would be on your return on investment.  Are you charging enough rent for this property?  Has your agent been reviewing the rent annually in line with the terms in your tenancy agreement?  Have you redecorated the property during voids to maximise the rent you receive and the quality of tenants?  If you're seriously up against it now with the mortgage payments then perhaps its time to think about selling?

Sit down with your agent and review your options to safeguard your investment now, and if you're not sure that your agent has the time or accumen to help you with this, then give us a call to discuss your options.  Afer all, sometimes a fresh pair of eyes sees opportunities that were there all along.