Simple Economics in the Leigh Property Market

Simple Economics in the Leigh Property Market

I penned a recent article about the state of the Leigh Property market and in particular what had happened to rents in Burton since 2008. If you recall, I said rents in Leigh are still 4.68% lower than they were in 2008. However, following a chat with a Burton landlord who then rang me after reading the Leigh Property Blog wanting to know more of the story of what was happening to rents in the City. The reason he asked was that his current agent hadn’t increased his rent for a number of years and was concerned if he was getting the best return from his buy to let investment.

The Leigh rental market is all about supply and demand - isn’t it so in all parts of the economy! On the supply side, 149 rental properties have come up for let in the last 31 days in Southend. It sounds a lot until you consider there are 5,453 rental properties in Burton, meaning only 2.73% of the rental stock of properties in Leigh is coming onto the market - it is normally is around 5%.  One reason for this lack of new rental properties coming on the market is the fact that tenants seem to be staying in properties longer.

With this lack of supply, newer tenants have to pay more to secure the property they want. This is the crux of the matter.. properties they want. Older properties in Southend, that haven’t been maintained, still retain their wood chip wallpaper from the 1970’s and thread bare carpets have seen their rents drop. Tenants now want either modern properties with all the mod cons or older style properties that have been presented to an exceptional standard – and they are prepared to pay for the privilege. Rents for top quality properties in Southend have risen by 0.4% in the last month Any properties, old or modern, put on the market in good or excellent condition normally rent within a matter of days.

   

Interestingly, looking at Leigh property values, the Land Registry have just released their latest set of data on property values. Throughout April 2015, the latest set of data, property values remained static in Leigh, with 0.2% growth, meaning they are now 2.5% higher than they were a year ago.  When one looks at the regional picture, the average property values in our area rose by 0.2% in the last month.

Looking forward, after considering all the statistics and talking to other property professionals, I expect property values in leigh to rise by 3% to 5% over the coming 12 months, following the Conservative Election victory.   In a forthcoming article, I will discuss how the number of properties changing hands each month has dropped considerably in the last 10 to 15 years in the town.

 

..and so back to our landlord. Each property is unique and, as his tenancy agreement allows him to inspect the property with notice to the tenant, we will be visiting the property next week with a fresh pair of eyes! 

For more in depth thoughts and opinions like this, on the leigh Property market.. visit the leighPropertyBlog.com