Stoke-on-Trent House Prices vs Stoke-on-Trent Rents since 2006

The Stoke-on-Trent housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Stoke-on-Trent, the market has certainly changed for both buyers and sellers alike (be they Stoke-on-Trent buy to let landlords, Stoke-on-Trent first time buyers or Stoke-on-Trent owner occupiers looking to make the move up the Stoke-on-Trent property ladder).

Stoke-on-Trent house values are 1.65% higher than a year ago, and the rents Stoke-on-Trent tenants have to pay are 1.6% higher than a year ago

When we compare little old Stoke-on-Trent to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back...

Since 2006, Stoke-on-Trent house values are 17.21% higher, yet the rents Stoke-on-Trent tenants have had to pay for their Stoke-on-Trent rental property are 17.7% higher

...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Stoke-on-Trent tenants are 24.3% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Stoke-on-Trent house values (in red) in the years of 2008 and 2009 ... yet as Stoke-on-Trent property values started to rise after the summer of 2009, see how Stoke-on-Trent rents dipped 6/12 months later (the yellow bars)…. Fascinating!


          

So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Stoke-on-Trent property.

However, maybe an even more interesting point is for the long-term Stoke-on-Trent buy to let landlords. The performance of Stoke-on-Trent rental income vs Stoke-on-Trent house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Stoke-on-Trent landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Stoke-on-Trent buy to let portfolio. More and more I am sitting down with both Stoke-on-Trent landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Stoke-on-Trent portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.