With an election just announced, the latest trends in and the summer holidays fast approaching…Toby is here to catch everyone up with the most recent trends from the rental market here in Bath!
As always, the YouTube video is below. Let us know what your thoughts are in the comments. Until next month folks!
Between 2020 and 2022, demand for properties in the UK far exceeded supply. This drove rents to unprecedented levels.
Here in the southwest, for example, the average rent has risen from £913 per calendar month (PCM) in 2016 to £1,339 PCM year to date in 2024.
Despite this, the last 12 months have seen a slight increase in the number of properties available for rent, both nationally and regionally. This is lending to a more balanced market. This article will explore these trends and see if the same is happening within Bath.
NATIONAL AND REGIONAL TRENDS IN BY-TO-LET:
Nationally, the rental market has witnessed a notable shift in the last 12 months. During the pandemic, many factors contributed to the surge in rental prices. There was a migration of people seeking a larger living space and avoiding the disruption of new housing developments. As restrictions eased, the rental market began to show signs of stabilisation. In a bid to help mellow the rising rental prices, there has been a slight uptick in the supply of rental properties.
In April of 2023, the average rent achieved for a new UK rental property was £1,641pcm. By April of 2024, this has increased by 8% to £1,772pcm.
This is a positive sign for rental prices levelling out, as only 12/18 months ago, the increase was in the mid to late teens.
The southwest continues to be ahead in this national trend of rent increases. In April of 2023, the average rent of a new property coming to the market was £1,166pcm. This increased 12.3% in April of 2024, to £1,309pcm.
The increased supply of rental properties has brought relief to tenants, who had been grappling with 20%+ increases in rent per annum for some types of properties over the last few years.
So, landlords, what does this mean for you?
Despite this rise in supply, the demand for rental properties continues to remain very robust. This ensures that yields continue to be attractive for landlords.
THE BATH RENTAL MARKET:
On a local level then what is going on?
Well, a similar trajectory can be seen here in Bath. Post-pandemic, rents have been surging due to that imbalance in supply and demand for rental properties.
For this analysis, we are looking at the first four months of 2023, versus the first four months of 2024. In 2023, 1,227 properties came to market in the Bath area (For this the postcodes are BA1/2) and attained an average rental value of £1,684pcm.
IN THE FIRST FOUR MONTHS OF 2024, 1,158 PROPERTIES HAVE COME ONTO THE RENTAL MARKET ACHIEVING AN AVERAGE RENTAL VALUE OF £1,860PCM, A RISE IN RENT OF 10.5%.
So, for landlords present and future, is buy-to-let a savvy scheme to invest in, in 2024?
Despite recent market adjustments, Bath remains a compelling investment for several reasons. They are as follows:
Bath’s rental market continues to benefit from strong demand. The city’s attractive location, good transport links, and quality of life make it a desirable place to live, ensuring a steady stream of potential tenants.
Compared to other regions, Bath offers a relatively affordable price. This combined with solid rental yields and long-term, stable, capital growth, makes it an appealing option for buy-to-let investors.
Bath continues to experience solid economic growth. Ongoing developments within infrastructure and amenities are not only increasing the quality of life for residents but it is also boosting the rental market by attracting more people to the area.
Recent stabilisation in the rental market suggests a move towards long-term stability. For landlords, this means the potential for consistent long-term rental income and growth over time.
WHAT ABOUT OUR TENANTS IN ALL OF THIS?
Tenants may be feeling concerned about all of this. Burdened by the recent increases in rent, it is important to note that these rent rises have aligned with the rise in inflation over the medium term since 2016. So, in real terms, the cost of renting has not disproportionately increased. However, some tenants are still continuing to struggle due to a lack of rise in wage rates.
There is a glimmer of hope for those tenants wishing for a more balanced market and reduced rate of rent. With more supply leading to more opportunities for renters to find a home that suits their needs and their budgets, it is likely there is more place for tenants to get their rent down.
THE FUTURE OUTLOOK FOR BUY-TO-LET IN BATH:
Looking ahead, the market here in Bath appears poised for continued growth and stability. This is due to the combination of strong demand, affordable prices, and the city’s continued economic growth. Mixing this all together leads to Bath remaining a valuable investment opportunity for potential Landlords.
Now is an opportune time for those sitting on the fence about the buy-to-let market to enter. The local and national stability of rental prices indicates a mature and sustainable market that has reduced risk and volatility.
Yes, that’s correct. On average, since the start of the turn of the millennium, homeowners in the Bath area have seen gains at an average of 8% growth year-on-year.
A ‘steady as she goes’ restriction in house price increase has been seen over the last few years since the pandemic hit, and this is likely to continue beyond 2024. However, we must look at the LONGER term. As much as we love to look into the short-term gains, the housing market is a medium to long-term investment for many people, so it is important to look at the house prices over this time. So, let’s look into the numbers:
ALL HOMES – (2001) £156,197 –> (2024) £442,791 = +£285,594 (8%/Yr)
APPARTMENTS – (2001) £116,254 –> (2024) £314,394 = +£198,140 (7.4%/Yr)
TERRACE/TOWNHOUSES – (2001) £139,962 –> (2024) £494,790 = +£354,828 (11%/Yr)
SEMI-DETACHED – (2001) £193,857 –> (2024) £402,413 = +£208,556 (4.7%/Yr)
DETACHED – (2001) £320,152 –> (2024) £643,462 = +£323,310 (4.4%/Yr)
Now, when looking at these numbers it is easy to forget that there has been 79% inflation over those 23 years, which eats into ‘real’ value. So, taking that into account, the real gains are as follows:
ALL HOMES -> +£158,928 (£6,910/year)
APPARTMENTS -> +£110,262 (£4,794/year)
TERRACE/TOWNHOUSES -> +£197,456 (£8,585/year)
SEMI-DETACHED -> +£116,058 (£5,046/year)
DETACHED -> +£179,917 (£7,822/year)
So, after inflation has been accounted for, the annual profit for an average Bath home stands at £6,910. This also shows that despite events such as the 08/09 credit crunch, which saw house prices plummet by over 15%, homeowners in Bath have still faired well over the longer term.
SO WHAT ABOUT BATH LANDLORDS?
Even though the number of landlords liquidating their property portfolios has increased in the last couple of years and the number of landlords buying is lower than in the 2000’s and the 2010s, there is still net growth in the size of the private rented sector each year. The simple fact is many Bath landlords remain keen on expanding their property portfolios for the longer term, despite current higher tax rates.
Alongside this, the younger generation sees renting as a choice that offers flexibility and alternatives that homeownership does not provide. This means that demand for rentals will keep growing, allowing landlords to enjoy rising rents and capital appreciation.
However, Bath Buy-To-Let Landlords must adopt a more thoughtful strategy to maintain a good return on investment. With changing laws around taxes and the balances in power, achieving returns similar to that of the last couple of decades requires more effort. If you are seeking advice on a long-term goal you have in mind for your property portfolio, then get in touch with our team here.
This week we wanted to reflect on what can make or break a property for prospective tenants when viewing or searching for a new rental. Time after time we are given requests that the property must have a good garden for the kids, or for couples to have their friends round for a meal in the summer and enjoy a good British BBQ, yes I am talking about the ones where we all go and sit outside in our garden, beers and drinks in hand, to then have to run inside to hide from the inevitable downpour.
So with that being said, the great British Garden, a green sanctuary that reflects the homeowners’ personality and style. Our love affair with our gardens is more than an aesthetic preference; it’s a testament to the value we place on our outdoor space. Whether it is for the kids to run around, families to enjoy a relaxing bathe in the sun, or for the dog to lie on the patio and get a well earnt rest, we all enjoy our time in the garden (at least when it isn’t raining).
As a letting’s agent in Bath, we see firsthand how a well-presented garden can have a significant impact on the appeal of a home to prospective tenants. A beautifully landscaped garden not only captivates potential tenants, but also can be what provides a tranquil retreat away from the hustle and bustle of the 9-5 or the often-stressful times that family life gives us.
These green havens can be the deciding factor when tenants are looking to rent. So, as a landlord, investing time and care into your homes garden can not only be a labour of love, but a savvy decision that will pay dividends when letting out your home.
Recently RESIDE Bath’s General Manager, Toby Martin, sat down and spoke with Off The Record – Bath and North East Somerset (OTR, BANES) to discuss the important work they do in the area to support young people ages 10-25 who are living, working or studying in the area. Currently they support over 2,000 people a year and have over 30,000 contacts on record. So, their work here in Bath is very important.
OTR are celebrating their 30th anniversary this year and we wanted to show our support. OTR are providing a multitude of services to help every young person struggling, including services such as – counselling, listening support, youth participation, advocacy, support for care leavers and a LGBTQ+ focused youth group. OTR believes that all young people should represented fairly and push a focus on equality for all, regardless of the race, gender or sexual orientation.
If you want to hear what James, Ella and Andros had to say to Toby about their experiences working with Off the Record alongside their own personal experiences and how we can all help make a difference then the video is attached, and you can sit down and watch right here within this blog.
If you want to learn more about OTR and what they do for our local community then visit their website, take a look and see if you can get involved.
What to read MORE from RESIDE? Click ‘read more’ to see our most recent blog entries!
Continue reading “RESIDE Bath talks with Off the Record – BANES”In our monthly summary of the rental market, Reside director Toby Martin looks at recent trends in demand and rent levels.
Bath recently played host to an enlightening and insightful gathering for landlords, the Bath Landlord Conference, held at the prestigious Francis Hotel on 22nd November 2023. This event, spearheaded by Reside director and ARLA Propertymark Regional Executive Toby Martin, was an essential evening for landlords seeking to navigate the evolving landscape of property regulations and investment strategies.
The conference commenced with Toby Martin’s comprehensive overview of the local market, providing attendees with a concise summary of recent landlord regulations. These insights were crucial, particularly in light of the recent changes reshaping the landlord-tenant relationship.
A notable highlight of the event was Mike Hansom’s address. As a Consultant Solicitor at BLB Solicitors, Hansom delved into the intricacies of Section 8 evictions, a topic gaining prominence as Section 21 faces abolition under the Renters Reform Bill. His expertise demonstrated how tenancies will be ended by landlords in the future, offering clarity and understanding amidst the regulatory shifts.
Ellie Donaghy, a professional property investor, brought bundles of energy and passion to proceedings. Her invaluable insights and proven strategies for identifying and maximizing property investment opportunities left attendees inspired and equipped for success in their ventures.
The event, attended by approximately 40 local landlords, fostered an environment of learning and engagement, with many attendees remaining behind to network after the talks had finished.
Stay tuned for details on the next Bath Landlord Conference, set to be announced in the New Year. For landlords seeking to stay ahead in an ever-evolving market, future Bath Landlord Conferences are not to be missed.
All the facts and figures on the rental market in Bath & beyond from October 2023, plus some significant lettings legislation news.
All the facts and figures on the rental market in Bath & beyond from September 2023, plus some significant lettings legislation news.
