Rental market overview in Cambridgeshire

With focus still on the Renters (Rights) Bill which is now expected to land this Spring there still seems to be a great deal of confusion about the ability for landlords to end a tenancy. In short yes you will but it may take longer. If you would like a fuller low down on where the legislation is standing you could watch our webinar here.

As we came out of the December lull the market took off again in the first week of January and has continued though to February with applicant registrations increasing by 196% YoY. We are still seeing the same percentage of landlords deciding to leave the market. With the main reason being to pay for care home fees and gifting money to the family now rather than pay inheritance tax.

Spread of bedrooms in the area

The spread of bedrooms remains the same with two bed homes making up the majority of the homes available.

Property availability

The graph above shows the number of properties that were available to rent in the area in the year so far (figures from Rightmove). There has been an increase of 9% year on year.

Activity

As I have always said the market is driven by supply / demand / affordability.

In February we advertised an average of 27 properties each week and received 540 applications. However, it must be remembered that only around 25% of these applications amount to people who are really interested in renting a property. Our job is to sort out the active people from the window shoppers! 

In the area as a whole there were 151 properties let which is a small reduction of 6% on the agreements achieved last year.

Marketing time

We have seen an increase in the number of days that it takes to find a new resident for rentals over £1,500 with more negotiations taking place and reductions to obtain marketing traction.

Rental comparisons for 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. As you can see the 4 bedroom homes are seeing a down turn in the rental achieved apart from nearer to Cambridge.

Overall:

1 bed property is now achieving on average £862
2 bed property is now achieving on average £988
3 bed property is now achieving on average £1,205
4 bed property is now achieving on average £1,626

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

PE27 has performed the best for 1 bed homes
CB24 and PE27 have performed the best for 2 bed homes
PE27 and 28 the best for 3 bed homes
Cb23 the best for 4 bed homes

The average YOY increase over the area is holding at 6%. Again, the main driver of these increases is down to mortgage rate rises and although the supply has slightly increased, we are still seeing and average of 15 people actively applying for each property. We are also 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.

Has prospective tenants’ behaviour changed?

No change here from recent months – but we are seeing more people not be quite as open on their initial conversations with us!

However, we are still finding that affordability is very much coming into play. Due to lack of supply prospective tenants are having to spend more than 30% of the household income on rent.

What return can I expect?

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

In this market the average gross rental yield that you should expect is anything between 5 – 6%.

If you are considering extending your portfolio why not book in a call with me to discuss the off market opportunities we have available.