Honourable and personal residential letting experts

10Apr

Rental spotlight – Cambridgeshire regional update, March 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 March 2024 there were 308 properties advertised to let across the areas that we work in. This was a massive increase of 168% from the figures we saw last month and a slight year on year increase compared with 2023.

Very surprisingly there were only slightly more properties let in March 2024 (132) compared with March 2023 (122). Given what was shown as let in February, we can definitely say the market is slowing down particularly at any property over £1,200 PCM. 

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 March we marketed an average of 14 properties a week and received 1,048  enquires – which means as per recent months, we were dealing with 78% more enquires than we were in March 2023 However although this is a drop in the type of figures we have been reporting, the early Easter factor will make a difference.  Through our prequalification system we actually spoke to 240 applicants. 

For those properties checking-in in March, it took an average of 13 days to find a new resident on an average rental of £1,000 and below; 26 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 us to find a new resident (from start of marketing to agreeing to take on a property) now stands at 22 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?

PE27 and PE28 have performed the best for year-on-year increases for one bed homes with CB23 performing the best for two and three bed homes. For a four bed home the best increase was achieved in  PE27.

 

As reported last month the average increase is slowing.

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 before, we are seeing 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 do 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. 

Sadley, 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 and 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 March 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!