As my regular readers know, my passion is talking about the Penicuik 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 Penicuik as more and more of their wages are being taken up by ever increasing rents.
The cost of renting a home in Penicuik has broken through the £750 a month barrier as the average rent for a property in the town now stands at £770 per month which is around 6.8% higher than 12 months ago.
House price inflation has certainly eased in Penicuik 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 Penicuik rents are a sign that the Penicuik economy is picking up.
This means Penicuik landlords are continuing to capitalise on the Penicuik property market. The most recent Registrars of Scotland data suggests the annual property price rises in the town have eased over 2015, leaving property values 1.23% higher than 12 months ago – last year annual property price rises were running at 11.67%. With property price growth easing off, the increasing rents mean that 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 Tory’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, there’s rarely been a better time to invest in rental properties.
However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth. Different parts of the town, different types of properties are experiencing quite different changes. For example, the average length of time Penicuik one bed properties take to rent is 13 days whereas it takes on average 30 and 72 days to rent 3 and 4 bed properties respectively.
When you start comparing different parts of Penicuik, the numbers are even stranger! The bottom line is that you must take advice and opinion. One source of advice and opinion is the Penicuik Property Blog. In the Penicuik 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.