Honourable and personal residential letting experts

5Jul

Rental spotlight – Cambridgeshire regional update, June 2023

Unless it’s your day job, you will not be looking at what is happening in the local rental market. 

We do, and keep a record of what is happening in order to help us to give you the right guidance when looking at rental reviews. That’s why we provide you with the information you need. 

This month we are taking a peek at the market just outside of the Cambridge City area – as they tend to skew average figures since they are so different from those outside of the CB1 to CB5 area.    

This month we are particularly looking at:

  • Comparisons between PE27/ PE29 compared to CB23/ CB24
  • What homes have seen the biggest rental yields year-on-year
  • How the markets changes are affecting behaviour

Overall, our data shows that rents have increased year on year by an average of 6.6%.

This can be further broken down if we look at the different areas we work in.

The market is still suffering from a lack of supply. Rightmove indicate that there are 30% less properties being advertised for rental than this time last year. Which means that rents are at an all-time high.

Interestingly the media has been reporting that 28% of peoples salary are going on monthly rental payments. But we look for affordability of a minimum of 2.5 x the household income compared to the rental. Ever has it been thus.  Therefore, for a rental of £950 per month we would be making sure the household income was no lower than £28,500. Given that salaries in the area are on average £51,400 we are in a good area.

The highest year on year increases we have seen for 1, 2 and 4 bed homes has been in the CB23 area – which includes Bar Hill and Cambourne:

 

Pe27 (St Ives), has achieved the highest increase for 3 bed homes:

Typical yields

The average rental yield in the local market ranges between 4 – 5% with not much difference between PE and CB. However, these figures are based on rents/purchase price and do not take into account a difference between leasehold and freehold. Our own data shows that the average yield our landlords are achieving is 8.2% with highest being 26.9% But the property was bought in 1996 – as they say, when is the best time to plant a tree?!

How the lack of supply is changing tenant behaviour

It will not surprise you that once a property below £1000 per month goes on the market, it is very quickly snapped up. However, because competition is so strong, people are agreeing to take several properties with different agents.  Since we are only allowed to take the equivalent of a week’s rent (see Tenant Fee Ban!) at the point of agreeing, there is very little cost to agreeing to take a property. We are keeping a close eye on this to make sure that your void period is not increased.

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

*Data from Maxine Lester Lettings and Property Management

**Data from Property Data