Several housing charities believe spending more than a third of someone’s salary on rent is exorbitant, and Wigan youngsters who are renting their homes are increasingly close to that position. The average 22 to 29-year-old in Wigan spends 26% of their typical salary on a one bed rental property, and 28% of their salary for a 2-bed home in Wigan.
Anything which reduces the cost of renting is good news for the residents who are looking to move into rented accommodation, and so the introductions of the Tenants Fees Acts 2019, which comes into force on 1st June, has been welcomed by most. The Act is expected to save renters at least £240 million a year by banning unfair letting fees and capping tenancy deposits at 5 weeks rent, but will this make a difference in the long term?
However, I personally know of a small handful of Wigan landlords selling some/or all of their rental portfolio as their portfolios become less economically viable with the recent tax changes for the buy to let market and the introduction of this act isn’t good news for landlords. Rents in the last 10 years have failed to keep up with UK inflation, so in real terms, landlords are worse off when it comes to their rental returns, (though they will gain long term via the increase in Wigan property values).
If the number of rental properties on the market reduces further, rents will rise (classic textbook supply and demand), and thus landlords’ return and yields will rise. Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Wigan will continue to grow in the next twenty to thirty years as we turn to more European ways where the norm is to rent rather than buy in the 20’s and 30’s age range.
Managing a successful property portfolio in the buy to let market can be tricky as new legislation is introduced. If you are looking for an agent that is well established, professional and communicative, then contact me to find out how we can help get the best out of your investment property.
Email me on firstname.lastname@example.org or call on 01942 233999
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