Thursday, 17 September 2020

Where have Chichester’s rental properties gone?

I’ve been writing these weekly articles and analysing Chichester’s property market for over six years now and never have I seen so few properties available to rent in Chichester. This time last year there was already a relatively low 106 properties seeking new tenants…today there are just 34.

Interestingly, the total number of properties on the market is down just 8% though (173 vs 189 last year) and that’s because the majority of the properties on the market are currently ‘let agreed’ (139 let agreed now vs 83 last year, equating to an increase of 67%).

Basically, rental demand is far outstripping supply. This is pretty evident as soon as you market a property to rent; since lockdown I have received double-digit enquiries within 48 hours of a new listing going live, with properties becoming let agreed within a few days. 

Houses typically perform stronger than flats, but this has accelerated since lockdown. For many who were stuck inside a flat without any private outdoor space and a higher concentration of neighbours, the benefits in a house they could call home became clear. Unfortunately for them, whilst there are 23 flats available to rent (still very low), there are only 11 houses available in the whole of Chichester (four two-beds / six three-beds and a solitary four-bedroom house).

There are a variety of reasons as to this particularly strong demand. Some households are separating after lockdown, whilst others are expanding. Many have had a change of circumstances in work, either in location or flexibility in working from home (which may mean they can move further away from their place of work and/or now require a dedicated space to work at home). And, as mentioned above, there are those wanting to move from a flat to a house.

There is, unfortunately, one scenario that is causing quite a few ‘happy as they were’ tenants to have to find a new home too - their current landlord wants to sell. Unfortunately, Covid-19 has led to many landlords re-evaluating things and concluding that the uncertainty over the future, along with a variety of ‘sticks’ that have been thrown at landlords (summarised as increased legislation, costs and taxation), means they no longer see property as a viable investment.

Ultimately this situation in the imbalance in supply and demand can only lead to a rise in rents. I thought this might be evident already, whilst this purple patch is with us, but it seems there is still caution to the pricing of new rental listings as the average rental figure in Chichester stands at £975pcm, down from £995pcm this time last year. 

IF we should get out the other side of this pandemic relatively unscathed economically (i.e. people largely remain employed) the ability for tenants to pay their rent should not become an issue (any more than the lack of general affordability in Chichester and the UK already is an issue of course!). What will become an issue though is the permanent loss of rental properties as landlords have been spooked (and taxed) into selling. For the landlords that remain, there will be just as many tenants wanting decent accommodation and, as a result, rents could well increase in the long-run.

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Chichester rental valuation

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