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Residential letting supply in Wales struggling to meet demand

At we entered 2014, Red Key put out a plea for more properties for their waiting list of tenants. Now that list has got even longer, says their Newport acting manager Rebecca Wheeldon…

As we move into Spring, it’s clear that demand for rented residential property here in South Wales continues unabated. And just to make that point, here are some interesting stats from our books:

  • An average of eight people are enquiring for each property as it comes onto the market.
  • On average, our properties spend just four days vacant between lets.
  • Rents have moved up by around 5% in the last year.

It’s easy to see why residential letting is so popular. Rising employment figures are encouraging many new people into the market – the chance to have a place of their own rather than sharing with friends or family – and not everyone, of course, is in a position to buy.

The impact of Wales’ version of the Help to Buy scheme (where the purchaser has to find just 5% of the purchase price for a new build home, with the Welsh Government taking up to a 20% equity slice) came into force in March. And while that has certainly helped stimulate demand, I see no signs of it impacting adversely on the letting market.

For a start, the Help to Buy only applies to new build… and that remains a very tiny part of the total housing market. Many first time buyers will still also struggle to raise a 10% deposit; and, if they do succeed, they will be paying higher rates of interest and lending charges, making purchasing less affordable: the best rates only apply with much higher deposits.

Of course, more houses are obviously being bought: in fact sales across the UK were up by almost 50% in the first two months of this year compared to 2013. But the bald fact here in South Wales is there are still more people than properties in order to meet demand. For many, buying is not always even the best option – especially in a jobs market where you may need to be highly flexible about where you work.

The most interesting trend I have noticed in all my years in this business is that more and more tenants are now professional families rather than what are described as “young professionals”, and this has helped drive demand for larger properties.

So what is in favour at the moment?

While city centre apartments are always popular, many tenants are very happy to live in the suburbs – especially if they have children.

We are also finding ready takers for properties above shops and business units.

And, as I said before, there are lots of families looking to rent as well as individuals – so everything from one bedroom ‘pied de terres’ right up to three and four bedroom houses.

In summary: we can let virtually whatever is available!

And if you have a property that seems suitable, but might need some work to make it lettable… well we can help sort that out for you too.

Just give us a call and we’ll tell you exactly what you can expect from your property – and what you’d need to do in order to maximize your return. Or, if you have funds to invest in a buy-to-let property and need a knowledgeable steer on getting the best possible value, we can put you on the right track there too!

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