YOUhome Blog

A recent survey by Shelter claims that tenants are cutting spending on food and heating to afford their ever increasing rents. Shelter noted that Bournemouth and Poole have the least affordable rents in the South West of England. How did we get to this point?

They went on to comment that private rents are in fact unaffordable in 55% of English boroughs, having already risen at one-and-a-half times the rate of incomes in the 10 years to 2007. New home building is at a post-war low, with just 134,000 new homes built in the UK in 2010, government figures show.

Tenant demand is outweighing supply, so much so, that many tenants must be prepared to pay increasing rates on modern, well-furnished rental properties. Over the past year, rents have increased by approximately 4.1%, the equivalent of an extra £28 per month.

The banking crisis has meant that young people looking to get on to the property ladder have not been able to do so. Banks have pulled back on lending and the requirements needed to obtain a mortgage have become stricter. As a result, many first time buyers now realise they need to save for longer to generate the deposit needed. In the meantime, they need somewhere to live - and that often comes through the private rental sector.

The knock-on effect of first-time buyers being unable to purchase, is that they are staying in their rental accommodation for longer. This in turn means fewer rental properties are becoming available. The supply and demand balance is in the landlord's favour.

This is good news for landlords, who are seeing tenants stay longer. At YOUhome, we have seen an increase in the average tenancy term achieved over the past year, along with more renewals than ever before. Our tenants are staying in rented properties for an average of 14 to 16 months now.

If you are an investor, now is a good time to consider purchasing smaller, one bedroom properties, in line with current market trends. We have seen tenant demand for smaller properties increase considerably: it allows couples or single people to cut their outgoings and make private rents more affordable. These types of properties are also producing higher rental  yields for our landlords. The majority of yields are now at 6% return and over. YOUhome is always open to share local insights into the private rental market across Bournemouth and Poole.

Key words: Private Rents, Lettings Agents, Property Investor, Rental Yields