The Office for National Statistics has released its latest UK house price figures, and you’d be forgiven for thinking that we are feeling pretty good about the news.
After all in the East Midlands, we’ve seen the biggest increases in rental prices in the country in the last 12 months – 2.8%.
But really, this is just another part of the property cycle. Sure, we’d rather have growth than decline, but for the property strategies we use, it’s a long-term game.
Prices will go up quickly, they’ll go up slowly. We’re banking that in the long term they’ll outpace inflation quite handsomely, which they’ve consistently done since records began.
So while we could say, “Look the areas we invest in are the best in the UK,” the real message is that our strategy works no matter where the market is heading.
If you want to know why I’m you shouldn’t gamble on property market predictions, I invite you to watch my video below.
When our landlords find out that rents have risen 2.8% on average in the last, their first question is usually,
“Do you recommend raising rents annually for incumbent tenants?”
The answer is a little nuanced, and it’s always best to talk to our lettings agents for any particular property or tenant.
That said, I believe in asking tenants for an increased rent in a market where other comparable rents are higher than the rent a tenant is paying.
I don’t subscribe to the view that tenants are driven out when rent is raised, creating voids and lowering returns.
From the tenants’ perspective, if they do move out (who likes moving house unless they have to?) then they will have to pay more rent anyway if the comparable rental properties are more expensive. Showing a tenant this black and white information often helps them realize they’re better staying put and paying more rent. This is, of course predicated on the fact that the property they are living in both meets their needs and is well positioned in the rental market.