Thursday 10 October 2019

Rents are down in Chichester

You may not think it by reading the mainstream media who suggest rent controls would be a good thing, but it’s true; the average rental price for a property in Chichester currently on the market to let is £950pcm. This time last year it was £975pcm. And when you bear in mind that two years ago the figure sat at a record-high £1,150pcm, it seems that rents in Chichester have dropped quite sharply these last couple of years.

The reason for this is quite simple - it all comes down to supply and demand. Two years ago there were just 88 properties available to let. One year ago supply had increased and there were 107 properties competing for tenants. Now there are 122 available. Whilst that still doesn’t seem a huge amount for our popular cathedral city, it’s actually coincided with a decrease in the number of properties that are ‘let agreed’.
Two years ago 77 properties were ‘let agreed’, whilst one year ago there were 73 properties that had tenants looking forward to collecting the keys to their new home. This figure currently stands at just 66. So, in short, there are more properties available for rent, meanwhile there are fewer actually being let! Market forces dictate this should lead to a drop in prices, which is exactly what has happened.

It’s interesting to note though, that when you break things down by property size, in the past year rents in Chichester have actually risen across the board, except for two-bedroom properties. Whilst I can understand this being the case with two-bed flats (there are currently 35 available and only 16 let agreed) I’m surprised it also applies to two-bedroom houses, with only 8 available versus 9 let agreed.

It’s easy to roll out the all-encompassing excuse that is ‘Brexit’ for this market slowdown. But, maybe it’s just that tenants are more settled in their homes so don’t see the need to move. It could of course be that some see their job security as weaker so are ‘hunkering down’ rather than moving home. But it was suggested once tenant fees were banned in June that there would be an exodus of tenants waiting to move without cost, which simply hasn’t happened.

With rents being flat in Chichester over the past four years, it highlights how landlords should not blindly follow what they read in the national press (UK rents are up 2.2% in the past 12 months). Instead landlords need to understand local supply and demand and the effect it is having on rents. Setting a fair rent that will keep tenants long-term is actually the best way to maximise your returns.

As the supply and demand of a particular rental property can turn on a sixpence, so can a property’s achievable rental figure. If you’d like a free rental valuation that bears this in mind, please get in touch.

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