Staines Rents - A rise of 22.6% since 2005 - Sounds good, but is it really?

 

The income from rentals has been progressively increasing over the last 12 years. Today, they are 22.6% higher than they were at the beginning of 2005. In fact, over the last five years, the average growth has been 2.4% per annum. From a landlord’s point of view, increase in average rental income is always welcome. However, the observant readers  amongst you will quickly note that we are ignoring an important factor – inflation.

But how do we work out how we are actually doing? Inflation since 2005 has been 38.5%, rent rises have been 22.5% in Staines.   In real terms,  when we compare rents in Staines to inflation since 2005, then we are 15.9% worse off than we were in 2005.

Of course, rental income is not the only way to generate money from property as property values can increase. Although in the short term, cash flow is being squeezed, many Staines landlords may be content to accept that for the very significant increase they are seeing  in capital value.
 

Property values in Staines have risen by 70.8% since 2005

 

 

 

This equates to a very decent 5.9% per annum increase over the last 12 years. Even more decent, when you factor in that this includes the 2008/9 property crash;  that makes us Staines landlords and investors feel so much better about the information regarding rent increases after inflation.

 

And of course, the point I always come back to , when I am talking about property, where else will you get those returns? 

It would be true to say, my rental income verses property prices study does lead to some interesting thoughts. I am often asked to look at my landlord’s rental portfolios, to ascertain the spread of their investment across their multiple properties. It’s all about judging whether what you have will meet your needs of the investment in the future. It’s the balance of capital growth and yield whilst diversifying this risk.

If you are investing in the Staines property market, do your homework and do it well. While some yields may look attractive, there are properties in many areas that do not have the solid rudiments in place to sustain them. If you are looking for capital growth, you might be surprised where the hidden gems really are. Take advice, even ask your agent for a portfolio analysis like I offer my landlords.  However, if they can’t help – well, you know where I am, the kettle is always on!