Agents in Plymouth report unprecedented rental prices in the city’s lettings market, with potentially huge yields for landlords.
Rising demand for quality homes in Plymouth is forcing rental prices up. While that is unfortunate for tenants, it represents good news if you rent out your property.
In fact, latest figures show that Plymouth landlords are currently averaging between 6% and 10% return on their properties.
Richard Rabin, Director of Lettings at Lang Town & Country, says that during his 25 years in lettings, he’s never known prices like they are now in the lettings market.
“For landlords, this is actually a very good time with the returns they are currently getting,” says Richard.
“We’re seeing landlords averaging anything from 6% to 10% return on their money. That’s got to be attractive.
“It’s also a good time to be a landlord if you’re in it for long-term capital growth. So, if you were looking at a 10- or 15-year plan, capital growth on your property is generally going to be very good.
What is demand like for rental properties in Plymouth?
Richard explains: “Tenant demand is still massive and rents are remaining very high. We had a lot of tenants looking to move in before Christmas, which is fantastic.
“January started off with some new properties coming to the market. However now, after three weeks, it’s really dried up again, which means there are a lot of tenants still out there looking.
“We’ve seen one-bedroom properties go from approximately £650pcm in late 2022 which are now fetching £750 to £775pcm. That’s for quality one-bedroom apartments, which is quite an incredible jump.
“Anything under £1,000pcm, we’re finding we get an awful lot of application forms on average over 30. There are a lot of people wanting properties in this price range.
“When you start going above £1,000, though, you do noticeably find a difference where you still get application forms, but they’re not so great in number.
“And once you go above £1,500pcm, then it really is quite a small number that are looking. But we do still tend to go in phases where it can be quiet for a couple of weeks then we get two or three applications for the higher-end rentals.”
What’s going to happen to the Plymouth lettings market in 2024?
Richard says: “November and December are predominantly very quiet months for us. However, at the end of 2023 and the start of this year, we did have some new properties come to the market, which is very positive.
“Going forward, we see 2024 being very much the same as it was last year. That means probably not enough stock for the amount of tenants looking and also prices remaining high, which is unfortunately for tenants.
“But this seems to be the way we are at the moment with the lack of stock in the market. Hopefully things will change, and more properties will come to the market.”
“What is clear is that the current lettings market is extremely attractive for investors, particularly if you’re in a position to buy a property outright rather than borrow money.
“In this instance, the returns can be substantial for landlords and create for you a long-term source of income for your future.”
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