Property View June 18

According to the most recent Home Track report (February
2018) values in Cambridge have dropped 1.5% year on
year, but will this have an affect on the rental market? In the
immediate short term, likely not, but if this becomes an
ongoing trend, those property owners considering selling
up may hold off until prices see an increase. This in turn,
will affect the stock of properties to purchase, possibly
pushing people to rent until they find their ‘dream home’
but also pushing buy to let investors into purchasing while
prices are down.
The average rent in the East of England, at the end of 2017
was £909pcm, in Cambridge this was £1202pcm (Landbay,
Rental Index Report). Cambridge is still a microclimate,
offering a unique setting for the housing market. So why
does Cambridge stand out and what part do Landlords
need to play in keeping these rents at this level?
Over the next three years, around two million sq ft of
office and laboratory developments will be delivered in
the Cambridge market. This is on top of the multinational
companies, such as Astrazeneca, Google, and Microsoft
who have already called Cambridge their home. The
increased investment in infrastructure is also increasing
the rental demand as more areas of the City become
popular for commuters; such as the Cambridge North train
station, improvements to the A14 between Cambridge and
Huntington and proposed plans for a Cambridge South
train station.
New developments such as Ninewells and Eddington,
together with some impressive high spec refurbishments
of existing stock, has improved the overall standard of
properties in Cambridge. Older properties can start looking
more dated in comparison to the newer developments so
keeping up with maintenance is key.
Larger companies in the City are attracting affluent young
professionals and families who expect their homes to be
well-presented and maintenance free in exchange for the
high rents they are being asked to pay. Landlords must
keep up with these expectations to ensure strong rents
continue. As Letting Agents, we need to ensure our clients’
property stands out from others on the market, giving the
best possible chance of achieving the expected rent level,
with a minimum void period.
“
Over the next three years,
around two million sq ft
”
Looking ahead, we expect clearer answers to the key
questions. Will the changes to stamp duty for first time
buyers reduce the young professional renters or the
length in which they rent? Will the changes with tax relief
on mortgage payments reduce the buy to let investors
and therefore rental stock, ultimately leading to an
underpinning of rental prices as supply drops but demand
remains steady? Will the uncertainty with Brexit hold
people back in buying and push them to rent until the
landscape is more certain? Only time will tell, but what
we do know is the Cambridge market continues to need
supply to meet the demand. This supply just needs to be
of a higher standard, to meet the increased expectations of
tenants.check before you allow potential tenants to come
round.
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