VALUATION REQUEST
 
 
 

Average Chipping Norton rents have increased by 22% since 2005

19/11/2016
 

Back in the Spring, there was a surge in Chipping Norton landlords buying buy to let property in Chipping Norton as they tried to beat George Osborne’s new stamp duty changes which kicked in on 1 April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in OX7:

 

January 2016 – 25 properties sold

February 2016 – 34 properties sold

March 2016 – 57 properties sold

April 2016 – 18 properties sold

May 2016 – 24 properties sold

 

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

 

However, there appears to be no apparent effect on the levels of rent being asked in Chipping Norton - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of buy to let mortgage interest tax relief will make some properties loss-making, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

 

... but it’s not all bad news for tenants. Whilst average rents in Chipping Norton since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Chipping Norton tenants are 15.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

 

Year

Average Rent in Chipping Norton per month

2005

1002

2006

1025

2007

1048

2008

1083

2009

1099

2010

1084

2011

1110

2012

1135

2013

1152

2014

1169

2015

1195

2016

1229

 

 

I found it particularly interesting looking at the rent rises over the last five years in Chipping Norton, as it was five years ago we started to see the very early green shoots of growth of the Chipping Norton economy.  As a whole, following the Credit crunch (2011), rents in Chipping Norton have risen by an average of 2.4% a year – fascinating don’t you think?

 

The view I am trying to portray is that while renting is often portrayed as the unfavourable alternative to home ownership, many young Chipping Norton professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

 


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