Honourable and personal residential letting experts

6Mar

Rental spotlight – Cambridgeshire regional update, February 2024

Our regional update this month focuses on:

·       Overview of the market

·       How the market’s changes are affecting behaviour

·       Comparisons on the rental values between PE27, PE28, PE29 CB23 and CB24

·       What homes have seen the biggest rental yields year-on-year

Rental market overview

During February 2024 there were 183 properties advertised to let across the areas that we cover. This was a decrease of 60% from February 2023.

Not surprisingly there were fewer properties let which equates to 15% less than in February 2023, but not as big a drop as you would expect since there was such a decrease in available properties.

Affordability still is coming out as the main factor in people not being able to take on a new property even though there are more people in the market.

In February we marketed an average of 18 properties a week and received 1,403 enquires – which means as per recent months we were dealing with 235% more enquires than we were in February 2023! An impossible task so we have had to resort to only dealing with applicants that complete a pre-qualification form. This means that we actually spoke to 341 applicants. 

For those properties checking-in in February, it took an average of 15 days to find a new resident on an average rental of £1,000 and below – 21 days on an average rental of £1,001 – £1,500 and 36 days on an average rental of £ 1,501- £2,500. Which means the average amount of time it takes to find a new resident (from start of marketing to agreeing to take on a property) now stands at 28 days.

Rental comparisons PE27, PE28, PE29, CB23 and CB24

You know we love a database and by having this type of detail we are best placed to give you the right guidance when looking at rental reviews and when you are considering extending your portfolio.

These average figures come from our records. Therefore, they are a mixture of the rent reviews that have been put in place over the last year. Plus, the rental figure achieved at the point of remarketing, and are split by the number of bedrooms.

Which areas have the highest year on year increase by number of bedrooms?

PE28 has performed the best for year-on-year increases for one bed homes with CB23 performing the best for two and three bed homes.

 

Overall we have seen a year on year increase on monthly rental of 8.5%.

This shows a slowing of increase pace from that we were looking at in August 2023 when the average increase was nearer 11.75%.

The main driver of these increases is down to mortgage rate rises. As we are now seeing landlords with long term residents who historically have kept rents lower than market rate now asking for an increase to market rate or in some cases higher than market rate as their mortgage has increased.

What are we seeing in prospective tenants’ behaviour?

As mentioned above, we have seen more first-time enquires than ever before. Therefore, before we call any prospective applicant, we would need them to complete a pre-registration form which askes a number of basic questions including salary level and when they want to move. 

Interestingly we have had far fewer no-shows to appointments which may be one indicator of how difficult it is to find a new home.  

However, we are finding that affordability is very much coming into play. People are having to spend more than 30% of the household income on rent. 

Sadly, fraud continues to be an issue we have to deal with. As we are now finding that applicants are doctoring bank statements and inventing job histories to improve their chances of being accepted as a new tenant. That is why we continue to be very vigilant asking the same questions throughout the initial conversation / viewing/ referencing process. Once we find a contradiction in the information given that’s our trigger to go into more details!  

What return can I expect?

As I have said many times before this is very much down to when you bought the property.

The average gross rental yield that you should expect is anything between 5 – 6%.

If you want to hear about other figures in Cambridgeshire just ask – we have tons of data!

Download our data

Click here to view our February data on an easy to read handout.

Extending your portfolio?

If you are looking to extend your portfolio, I would say now is a good time to see what is out there as prices seem to be in the doldrums.

If you would like to book a free exploratory chat with me just click here!