Honourable and personal residential letting experts

10Jul

Rental spotlight – Cambridgeshire regional update, June 2024

Highlights:

  • Supply has remained the same year on year (YOY).
  • Demand has increased
  • YOY Rental prices have increased by 5.00% for the area we cover
  • Our area remains vibrant.

Rental market overview

During June 2024 there were 315 properties advertised to let across the areas that we work in. This was an 58% increase from those advertised in June 23 and a 8% increase from May 2024.

Compare this with 143 properties that were let in the month again on par with what happened in June 2023.

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 June we marketed an average of 8 properties a week and received 1,396 enquires which compared with last year is 57% more enquires on roughly the same number of properties! As per recent months we found that only 27% of enquires translated into people actively looking for a property.

For those properties checking-in in June, it took an average of 9 days to find a new resident on an average rental of £1,000 and below: 13 days on an average rental of £1,001 – £1,500 and 9 days on an average rental of £ 1,501- £2,500 due to the fact that we had a resident lined up. 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 12 days.

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.

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

Results have remained the same for the last 4 months with PE27 performing the best for year-on-year increases for one and four bed homes. However this month, PE27 has over taken CB23 with a 9% increase for 2 beds but, CB23 remains the top performer for 3 bed homes.

Again the main driver of these increases is down to mortgage rate rises and lack of supply. 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.

Has prospective tenants’ behaviour changed?

No change here from recent months – yes behaviour continues to change given the competition to find a new home.

From the figures above you can see that we are talking to 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 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.

Sadly, fraud/bending the truth continues to be an issue we have to deal with. We are now finding that prospective tenants 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.

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.