‘The housing market is booming’, it’s all we’ve heard since the easing of restrictions for selling and letting after lockdown 1 in 2020. House prices across the country are on the increase and specifically across Gloucestershire have gone up over 14%. Following this, rents have also increased and where your typical one-bedroom flat in Tewkesbury back in the summer of 2019 would have set you back around £495 pcm, the same one bedroom flat now would be more like £550 pcm, an increase in two years of 11.11%.
Something else we hear estate and letting agents banding about all the time is the word ‘demand’. Demand from buyers, Demand from applicants, believe me, it’s off the scale right now. From the point of making a property live on Rightmove and Zoopla, it’s not uncommon for viewing slots to be filled in a matter of minutes. Its usual now that every new property will have multiple offers and we are even starting to see available rental properties going to sealed bids. Here at CGT, we received an increase of 76% more applicants enquiring about available property to let in 2021 than we did in 2020 and the recent ARLA Propertymark survey showed demand from tenants in July was their highest ever month recorded with 102 new tenants per branch across the UK. As we cover most of the county of Gloucestershire, I believe our data gives a good overview of what is going on in our area.
But with this surge in demand, has come a constriction of available stock.
In the whole of Tewkesbury, an area with a population of approximately 92,550, there are currently only 10 rental properties available, 3 which were listed in the last 14 days. This means that it could be on average of 9255 applicants per available property…
Looking next at Stroud, the numbers are similarly alarming. Stroud has a population of 32,670 and there are currently only 9 rental properties available, with only 4 listed in the last 14 days. This works out as one available rental property per 3670 people. Both towns used to have upwards of 70 properties available to let at any time and so it is no wonder that we are experiencing more anti-social behaviour issues towards front office staff as applicants are desperate to be first in the queue find their new rental home.
Cheltenham and Gloucester are also seeing less new stock being advertised too but it is the extremely low numbers for the towns of Stroud and Tewkesbury I wanted to focus on for this blog.
But what factors are driving this lack of stock?
One current factor for lack of stock could be the legislative squeeze being placed on private landlords coupled with changes to tax laws meaning letting property is seen as less profitable. In the last 2 years alone, we’ve had changes to EPCs, EICRs and Tenant fees which are more costs for landlords to bear. This could mean despite rents increasing to help with some of these costs, more landlords are deciding it’s not worth it anymore and selling up. Often offloaded rental stock will be lower value properties which frequently sell to first time buyers which means stock is being lost that would traditionally stay in the rental sphere.
Further to this, we are not experiencing the ‘churn’ of tenants we were previously used to. Having to find upfront rent and deposits in a time of financial uncertainty could have added to a reduction in tenants moving out. At CGT we experienced a 30% reduction on tenants moving out each month which has meant less re-let stock is joining the market as more tenants stay put in their homes. This may be exacerbated in desirable countryside locations like Stroud and Tewkesbury where current occupants aren't willing to move.
Finally, due to strong demand many agencies are not having to advertise their available properties, instead relying on pre-registered applicants to take the property without it going live on Zoopla or Rightmove. The flaw in this is waiting applicant lists tend to be in their hundreds and letting agents only usually carry out between 5-10 viewings at the absolute maximum. This means that if you are a waiting applicant looking for somewhere to live, you are relying on you being one of the first to respond to an email when a property goes live, or one of the lucky first ten that are called by an agent. This unfortunately must mean many applicants are missing out.
The good news is that if you are someone with rental property in Tewkesbury or Stroud that you are already in the middle of purchasing, vacant as you’re doing work OR with a tenant that is about to move out, you know that your property will let quickly and probably for more rent than you thought it would. Furthermore, if you are an investor and this has piqued your interest about buying in these areas, we not only have the local area knowledge but we also have a department that has been specially set up to guide you through this whole process including viewing properties on your behalf, providing yield and refurb advice and then sourcing you the perfect tenants.
One thing is for certain, its impossible to keep up with demand when it comes to rental property in Gloucestershire.
Angharad Trueman - Managing Director CGT Lettings Ltd