The Future of the Thanet Buy-to-Let Market in 2024
The UK's property market is facing a significant challenge as the availability of homes for rent has plummeted to its lowest level in five years, exacerbating the difficulties tenants face in finding affordable accommodation.
This alarming trend was highlighted in a recent analysis, which revealed that in 2023, only 261,542 private rental homes were available per month in the UK, marking a steep decline from the 379,459 monthly average of rental homes available in 2020 - a drop of 31%, underscoring a worrying trend that has been developing over recent years.
This scarcity of rental properties is occurring against a backdrop of increasing mortgage costs for landlords, which, in turn, places additional pressure on the rental market.
Higher interest rates, coupled with a high demand for rental properties, have led to significant increases in rental prices (rising from £1,343 pcm in 2020 to £1,739 pcm in 2023 - an increase of 29%), making it increasingly difficult for tenants to find affordable housing.
The combination of reduced availability and escalating costs creates a challenging environment for renters, finding fewer properties available at higher rents.
How is this an opportunity for Thanet landlords?
The current property market could present a notable opportunity for Thanet landlords. To do that, we must look at the background statistics and numbers for the Thanet area.
These are the average monthly stock levels of private rental homes in the Thanet area (CT7 to CT12):
- 2019 - 557 rental properties per month in the Thanet area
- 2020 - 501 rental properties per month in the Thanet area
- 2021 - 352 rental properties per month in the Thanet area
- 2022 - 458 rental properties per month in the Thanet area
- 2023 - 554 rental properties per month in the Thanet area
The average rent in the Thanet area in 2020 was £825 per calendar month; in 2023, it was £1,069 per calendar month.
Thanet rents have risen by 29%, even though available rental stock increased by 10% since 2020 (bucking the national trend).
What about Thanet tenants?
As the UK grapples with this challenging rental market landscape, a multifaceted approach is needed to address the underlying issues. This includes considering the impact of mortgage costs on landlords, the affordability of rents for tenants, and the overall availability of rental properties.
The Government needs to build more homes. Yet excluding land, the building costs in the UK start from £163 per square foot. A 3-bed semi is a minimum of 1000 ft.². The most conservative estimate shows that Britain is approximately 2 million households short now, meaning the bill for those additional 2 million homes would be £326bn (excluding the land). For context, the NHS costs £181bn a year!
The Government currently spends £17.35bn a year on housing, which would need to increase to £49bn a year for the next ten years to pay for those 2 million homes. To give you an idea of what that would cost taxpayers:
Income tax would need to rise by 5.81p in the pound to pay for those additional 2 million homes!
That is the equivalent of an extra £991 per year for every taxpayer for the next ten years - not a vote winner! Yet without significant Government intervention and strategic planning, the difficulties tenants face in finding affordable homes will likely persist, with potential long-term implications for the housing market and the broader economy.
Meanwhile, British landlords must pick up the pieces and continue to buy properties. Unfortunately, it is the nature of the game that with limited supply and increasing demand, prices (i.e., rents) go up. My heart goes out to Thanet tenants having to pay these increased rents, but the market is the market, and we cannot control that. It has been proved beyond doubt, in Scotland and around the world, that rent controls do more harm than good, so I hope that the Government grasps the nettle and finally does something to sort our housing issues once and for all in the medium to long term.
Please do give me your thoughts on the matter.
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About Cooke & Co
Cooke & Co, a liked and respected estate agency trading since 1992, is conveniently situated in the picturesque seaside district of Thanet. We proudly operate from our local offices in the region's primary towns, namely Margate, Broadstairs, and Ramsgate. Additionally, our extensive reach encompasses the charming areas of Westbrook, Westgate, Birchington, Monkton, Manston, and Minster. Our presence in these diverse locales enables us to offer an enriched understanding and comprehensive service to the property market in these prime coastal towns and villages.
Contact our offices at the following numbers:
- Margate Office/Area: (01843) 231833
- Ramsgate Office/Area: (01843) 851322
- Broadstairs Office/Area: (01843) 600911
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