Average Rent Paid by Tenants in Basingstoke has risen to £907 per month

Back in the Spring, there was a surge in Basingstoke landlords buying Buy to Let property in Basingstoke as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1^st 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 RG21.

 

	Jan 2016	33 properties sold
	Feb 2016	41 properties sold
	March 2016	71 properties sold
	April 2016	20 properties sold
	May 2016	21 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 rents would be affected in a downwards direction as a result of the additional purchases?

 

However, there appears to be no apparent effect on the levels of rent being asked in Basingstoke, and more importantly achieved. 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 lossmaking, 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.

 

It’s not all bad news for tenants though. Whilst average rents in Basingstoke since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Basingstoke 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 Basingstoke per month
2005	740
2006	757
2007	773
2008	799
2009	811
2010	800
2011	819
2012	838
2013	850
2014	863
2015	882
2016	907

 

 

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

 

Although we are likely to see a dip in demand for rental properties during certain times of the year such as Christmas, and therefore a delay in renting certain types of property, this rent trend does not seem likely to change any time soon.

 

What I am trying to highlight is that while renting is often portrayed as the unfavorable alternative to home ownership, many young Basingstoke 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.

For more thoughts and opinions on the Basingstoke Property Market, if you are a Basingstoke Homeowner or Basingstoke landlord, please visit the Basingstoke Property Blog.