103 properties have come up for let in the last 31 days in Solihull...

Following on from my recent article about rental values since the recession, (where I’d found that rental values in the city are around 5.6% higher than they were in 2008) I’ve now looked into the forecasts for the next 12-24 months, to decipher if and when landlords should consider price increases on their rental portfolios.

As with all parts of the economy, the rental market is all about supply and demand. On the supply side, 103 rental properties have come up for let in the last 31 days in Solihull. This sounds like a reasonable amount - until you consider there are around 5,242 rental properties in the area. Therefore, only around 2% of the rental stock is coming onto the market each month (the UK average is about 5%).  

So, could it be that the reason for this lack of new rental properties coming on the market is that professional tenants seem to be staying in their properties longer?

With a lack of supply, newer tenants have to pay more to secure the property they want. Poorly maintained homes, which may still retain 70’s décor and green bathroom suites have seen their rents drop. However, swish apartments with all the mod cons and new-build semis are still being snapped up – and tenants are willing to pay for the privilege. In fact, these types of homes have seen rents rise by 1% in a month, which just goes to show that good quality property will always rent the fastest.

Interestingly, looking at property values, the Land Registry has just released their latest set of data. For the most current figures, property values actually remained static in the month, although they are around 3.2% higher than they were a year ago.  When one looks at the regional picture, the West Midlands average rose by 0.2% for the same period.

Looking forward, after considering all the statistics, I still expect sale prices in Solihull to rise by 3% to 5% over the coming 12 months.  Similarly, unless something drastic happens in the economy, the demand for rental property is unlikely to fall any time soon and therefore rental prices will follow suit.

Therefore, if you are a landlord, or are considering becoming one, it would be my advice to spend a little money on redecorating your buy-to-let and / or buying some new furniture to beat the competition. If your property is already in good nick, now might be the time to consider a rent rise – although I’d think carefully before doing so if you’ve got reliable tenants! An extra £25 per month isn’t worth the hassle if you’re replacing great tenants for poor ones.

If you would like further information on the Solihull property market or investing, please email me on jane.morcom@centrickproperty.co.uk .