The Peterborough office experienced a record breaking year last year. Between the months of July and October, we consistently achieved over 50 lets each month, a figure we had not hit previously. Our tenant enquiries were at an all time high and well presented properties were letting within a couple of days of coming to the market.
We experienced a higher than average number of landlords deciding the time was right to sell their investment properties, we feel owing to an increasing sale value.
Owing to strong relationships with developers taking advantage of permitted development rights, we were pleased to be involved in a number of commercial to residential conversions which provided an increase in well presented, spacious and affordable apartments in the Peterborough area. These relationships are continuing into 2015 and we have a number of developments in the pipeline.
The level of rents in our area for Q4 14 and how this compares to Q4 13
The majority of rents have increased year on year, I’ve included three examples below to demonstrate this
8% increase in rental value
4.5% increase in rental value
3% increase in rental value
The greatest increases in rents have been on 2 bedroom apartments, close, or within the city centre.
Larger properties (3 bedroom+) have not experienced as much of an increase.
What's renting/what's not
2014 saw an increase in the demand for well presented, en-suite rooms within Peterborough. In years previous to this, we have had to lower rents for rooms in order to secure applications however 2014 saw an increase in rents (between 10 and 15%).
Across our portfolio of managed houses in multiple occupancy, our landlords are having no void periods between tenancies and we are receiving an increasing number of enquiries from first time landlords looking to venture into this area of BTL.
As always, 2 and 3 bedroom apartments and houses are our most popular properties and have been in consistently high demand throughout 2014 and into 2015.
2 bedroom apartments with equal sized double bedrooms are in highest demand due to the flexibility of who they appeal to, couple, singles, small families and sharers. The sharers market has increased over recent years and is continuing to do so, with single professionals choosing to live with a friend or colleague to lessen their accommodation expenses.
Stock levels in Q4 2014 were slightly lower than Q3 2013 and we believe this is due to three factors;
We had a higher number of tenancies end in Q4 2014 than the same period in 2013 however of these move outs 11% (6% in Q4 2013) were not properties which we were reletting because the landlord was either selling or moving back into it.
Properties were letting so quickly in Q3 of 2014 and quicker than anticipated so we did not have time to make up the stock with new properties for the start of Q4.
Our instructions for Q4 declined from mid November onwards in Q4 of 2014 as the majority of properties/landlords were not ready until Q1 of 2015.
We have opened Q1 of 2015 with good stock levels and based on the same period last year, our stock is up by just over 25%.
Our thoughts on the market for 2015
Since start of the New Year, our enquiries from potential tenants have been consistently high and our viewing diary is full.
We are working with an increasing number of investors and BTL landlords looking to either purchase their first property or increase their portfolio. Due to the recent changes in stamp duty values and the upcoming pension reform, we predict that this increase is set to continue as landlords can now achieve greater returns and utilise their pensions to buy property.
We are not predicting any changes to tenant trend or preference and feel that this will be consentient with what we saw in 2014.
Rents are likely to increase again this year but not at the rate that they did last year. Based on information currently available, tenants and landlords should expect an increase of between 3 and 5%.
We believe that 2015 is set to be another successful and busy year in Peterborough for landlords, tenants and agents alike.
Find out more from the Belvoir Peterborough office here