Sheffield tenants feel the squeeze as rents continue to rise
As my regular readers know, my passion is talking about Sheffield property. As a property agent I like to comment on the Sheffield property market, which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Sheffield as more and more of their wages are being taken up by ever increasing rents.
The cost of renting a home in Sheffield has broken through the Â£600 a month barrier as the average rent for a property in the city, now stands at Â£631 per month, a rise of 1.2% last month, leaving rents for new lets 4.6% higher than they were 12 months ago.
House price inflation has certainly eased in Sheffield 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 an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increase in Sheffield rents are a sign that the Sheffield economy is picking up.
This means Sheffield landlords are continuing to capitalise on the Sheffield property market. The most recent Land Registry data suggests the annual property price rises in the city have eased over 2015, leaving property values only 3.56% 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 Toryâ€™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, thereâ€™s rarely been a better time to invest in rental properties.
However, (you knew there would be a however!), itâ€™s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.Â Different parts of the city, different types of properties are experiencing quite different changes.Â For example, the average length of time the 414 Sheffield properties up for rent between Â£250 to Â£500 per month is an eye watering 135 days, whilst the average length of time the 509 properties at Â£500 to Â£1000 per month is 71 days and 99 properties that fall into the Â£1000 to Â£2000 per month price bracket is 99 days.
When you start comparing different parts of Sheffield, the numbers are even stranger!Â The bottom line is that you must take advice and opinion. One source of advice and opinion is the Sheffield Property Blog. In the Sheffield 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, â€˜Homes Under the Hammerâ€™ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Sheffield property BlogÂ https://www.sheffieldpropertyblog.com