Solihull tenants feel the squeeze as rents continue to rise

As my regular readers know, my passion is to talk about the Solihull property market as a property agent, I hope this is of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Solihull as more and more of their wages are being taken up by ever increasing rents.

The cost of renting a home in Solihull has nearly broken through the £1000 a month barrier as the average rent for a property in the town, now stands at £980 per month, a rise of 1.2% last month, leaving rents for new lets 4.5% higher than they were 12 months ago.

House price inflation has certainly eased in Solihull from the heady days of 2014, but still with retail price inflation (for goods and services) reducing to 0% any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and therefore the desire for decent high quality rental properties continues to exceed the available rental stock.

I would go as far as to suggest that rents are a good barometer to the state of the local economy as a whole and strongly believe that the recent increase in Solihull rents are a sign that the Solihull economy is picking up. 

This means Solihull landlords are continuing to capitalise on the Solihull property market. The most recent Land Registry data suggests the annual property price rises in the town have eased over 2015, leaving property values only 3.76% higher than 12 months ago, so as property price growth is easing off, with the increased rents, rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable after the mad months of May and June after the Tory’s got back into No.10, and so, everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.

You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates so low and returns still extraordinarily attractive, this is a rare situation and a great opportunity to invest in rental properties.

However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents, capital growth and time on the market.  For example, the average length of time the 78 Solihull properties, between £500 to £1000 per month, are up for rent is 43 days, whilst the average length of time the 20 properties at £1000 to £2000 per month is 68 days and 4 properties that fall into the £2000 to £5000 per month price bracket is also 68 days. These average timeframes seem long, I have to say that in our experience they are a lot shorter.

When you start comparing different parts of Solihull, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is the Solihull Property Blog. In the Solihull Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.

Whether you are a landlord, ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please email me or pop into our Solihull property lounge for and drink and a chat.