The Citylets Belfast Rental Report - Issue 1, Q1 2010

The Citylets Belfast Rental Report | Issue 1 | Q1 2010
www.citylets.co.uk
Trends in Belfast
Residential lettings
The Private Rented Sector (PRS) is playing an increasingly significant role in the provision of
housing in Northern Ireland. The latest figures from the Housing Executive show that the number
of privately rented dwellings has risen from 28,600 in 1991 to 124,600 in 2009. Citylets has been
operating in Northern Ireland for just two years but has seen a large rise in the number of properties
it carries on its site during that time. With the experience gained from producing the definitive guide
to the Scottish rental market over the last 3 years now is the right time to start quarterly reporting on
the Belfast rental market. Our report is based on several thousand properties advertised on Citylets,
more details of the methodology used can be found at the back of this report.
Belfast has seen average rents fall to £544 in the
1st quarter of 2010, a drop of 6.2% from the same
time last year and down 2.5% on the previous
quarter. This downturn is slight when one considers
the volume of new rental property that has come
on to the market in the last two years as a result
of the dramatic downturn in the sales market. The
most recent review of the housing market from the
Department of Communities and Local Government
(DCLG) presents a house price index figure for Feb
2010 of 185.6 which is down 34% from the peak seen
in Aug 2007 (281.5) Feb 2002=100.0.
Belfast Average Monthly Rent
Q1 2008 - Q1 2010
£650
£600
£550
£500
2008
Q1
It is clear that many property owners who were
unwilling or unable to sell have become ‘reluctant
landlords’ which led to pockets of oversupply of rental
property. This would normally lead to a significant
downturn in rental values however the ‘credit crunch’
and the resulting tightening of lending criteria and far
higher deposits requirements has meant that many
prospective first time buyers are unable to get on the
first rung of the property ladder and are staying in
rented property for longer. Unusually, both supply and
demand in the PRS have increased during the last
two years which is good news for letting agents.
In this context Belfast’s slight decline in average
rental values will seem quite benign for investors
especially if one considers that the rental yields have
become far more attractive now that the capital value
of residential property has come down so much.
2008
Q2
2008
Q3
2008
Q4
2009
Q1
Northern Ireland House Price Index (DCLG)
March 2002 to Feb 2010
2009
Q2
2009
Q3
2009
Q4
2010
Q1
Index level (Feb 2002=100)
300
250
200
150
100
50
0
Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10
In association with
www.citylets.co.uk
The Citylets rental index for Belfast has been mix adjusted and reflects movements in rent rather than changes in the types of property
being rented which often has a seasonal component. Our index was initiated in January 2008 (100) and at March 2010 stood at 98.9 which
suggests that the PRS has adapted very well to the downward shifts in the housing sales market – the index is down just 1.1% in that time.
Over the same period the NI Housing Index (DCLG) was down 26%.
Citylets Rental Index v Houseprice Index
Index level (Jan 2008=100)
Jan 2008 - March 2010
120
Belfast Rental Index
110
Month
2008
2009
2010
Jan
100.0
101.8
93.0
Feb
106.8
99.8
96.1
Mar
97.7
106.9
98.9
Apr
99.1
108.9
May
102.8
110.3
Jun
107.7
102.1
Jul
110.3
99.3
Aug
113.4
108.9
Sep
109.6
106.2
Oct
106.6
99.3
Nov
100.2
98.9
Dec
102.3
97.5
Base: Jan 2008 = 100
100
90
80
70
Citylets rental index
House price index
60
Jan Feb Mar Apr May Jun
08 08 08 08 08 08
Jul
08
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
08 08 08 08 08 09 09 09 09 09 09
Jul
09
Aug Sep Oct Nov Dec Jan Feb Mar
09 09 09 09 09 10 10 10
Time To Let
Q1 2009 - Q1 2010
Q1 2009
Time to let (TTL) -another key indicator of
demand in the PRS- currently stands at 57 days
in Belfast which is more than two weeks longer
than the average TTL of 41 days seen in Scotland
though this is still far lower than the TTL of 73
days in Q1 2008. Another encouraging signal is
the proportion of properties renting in less than 4
weeks has more than doubled in the 1st quarter
2010 (41%) from the 1st quarter 2009 (19%).
1 weeks
2 weeks
3 weeks
4 weeks
Q1 2010
>4 weeks
Change in Time To Let By Property Type and Size
Q1 2008 - Q1 2010
A detailed look at TTL by Property type and size shows that it is the smaller properties that are renting the most quickly. 1 bed apartments are
currently taking on average 40 days to let while 4 bed houses are taking 64 days.
80
1 Bed Apartment
Days
70
2 Bed Apartment
60
2 Bed House
3 Bed House
50
4 Bed House
40
30
2008_Q1
2008_Q2
2008_Q3
The Citylets Belfast Rental Report | Issue 1 | Q1 2010 | p2
2008_Q4
2009_Q1
2009_Q2
2009_Q3
2009_Q4
2010_Q1
www.citylets.co.uk
Detailed
Rent Guide
The detailed rental trends by
property type and size can be seen
in the charts below and illustrate
the variability that has been seen in
the Northern Irish PRS over the last
two years.
Looking at the rental growth and TTL by number of
bedrooms across Belfast the average rent for 1 bed
properties was £455 in the 1st quarter 2010 a year on
year decline of 4.4% though encouragingly the TTL
figure has come down significantly by 23 days during
the same period which would suggest that rental
values are likely to firm up in the next few quarters.
In the equivalent period average monthly rentals for
2 bed properties in Belfast were £510 representing a
year on year decline of 5.2% but again TTL improved
by 13 days. While average rents were £521 for 3 bed
properties an annual decline of 8% and a TTL of 62
days down 14 days from Q1 2009.
The mix of private rental stock in Belfast is very
different to the Cities in Scotland where apartments
predominate. In Belfast apartments make up just
41.3% of all rentals and houses the remaining
58.7%. This helps explain why the average rent
for a 3 bedroom property is just £11 more than a 2
bedroom property. The majority of 2 bed properties
are apartments which tend to be modern and
more expensive while the vast majority of 3 bed
properties are terraced houses which are historically
more affordable.
The clear message is that the
smaller properties have seen
smaller rental declines and
are renting more quickly than
larger properties.
4 bed
3 bed
2 bed
House Rental Values by Number of Bedrooms
Q1 2008 - Q1 2010
£900
£800
£700
£600
£500
£400
£300
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
3 bed
2 bed
1 bed
Apartment Rental Values by Number of Bedrooms
Q1 2008 - Q1 2010
£900
£800
£700
£600
£500
£400
£300
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
1 , 2 and 3 Bedroom Comparison
Average
Growth
Average
Change
Let
Let
Rent
Q4 2009-
TTL (days)
Q1 ‘09 -
within
within
Q1 2010
Q4 2010
Q4 2010
Q1 ‘10
a week
a month
1 bed
£455
-4.4%
38
-23
16.1%
52.9%
2 bed
£510
-5.2%
58
-13
4.8%
49.0%
3 bed
£521
-8.0%
62
-14
6.0%
49.0%
Bedroom
The Citylets Belfast Rental Report | Issue 1 | Q1 2010 | p3
The Citylets Belfast Rental Report | Issue 1 | Q1 2010
In this section of the report we look at a local analysis of the rents across the
wider Belfast region and provide a unique ‘heat map’ identifying the most
expensive and cheapest areas to rent.
Area
Rent Guide
Not surprisingly it is the leafier suburbs of Malone, Stranmills and Rosetta in
South Belfast that stand out as the 3 most expensive areas to rent in Belfast.
Contrasting with this the 3 most affordable areas are Woodvale, Blackstaff
and The Mount.
Most Expensive Areas to rent
1 bed
Malone
2 bed
3 bed
£629
Stranmillis
Rosetta
4 bed
All
TTL(days)
£1,056
£923
47
£885
£786
52
£703
£751
£898
£724
57
£631
£634
£669
£633
52
£632
46
£620
34
£609
47
£589
50
Cherryvalley
£576
60
Knock
£574
53
Windsor
£485
Musgrave
£632
Stormont
£436
Duncairn
Botanic
£410
£608
£870
£682
£454
£580
£588
£748
Cheapest Areas to rent
1 bed
Woodvale
2 bed
3 bed
All
TTL(days)
£369
£369
4 bed
£383
52
Blackstaff
£396
£395
£395
£408
45
The Mount
£378
£444
£444
£445
61
Bloomfield
£425
£435
£435
£449
59
Ballysillan
£435
£435
£449
57
Fortwilliam
£407
£407
£463
46
Sydenham
£449
£449
£473
50
Castleview
£515
£515
£473
50
Woodstock
£442
£442
£617
£474
66
£480
£480
£562
£484
76
Water Works
£374
£495
Note: Area analysis is based on 6 months of data for statistical purposes.
Methodology
Disclaimer
The statistics are based on rental properties advertised on Citylets. Rather than
employ snapshot sampling our observations are recorded when a property is
removed from the site as let. We believe such transaction-based observations
provide a better reflection of the market.
Whilst we have made every effort to ensure information published in this report
is correct Citylets gives no warranty or representation as to the accuracy or
completeness of the information. The report does not constitute legal or other
professional advice. We reserve the right to change methodology, discontinue or
revise indices or other analysis at any time.
The data is cleansed to remove multiple entries and other anomalies. Our
cleansing process continues to guide refinements to data recording.
Averages are calculated on a monthly or quarterly basis as weighted (mixadjusted) means. Indices are constructed holding composition (property type and
number of bedrooms) fixed at the average of the last three years. This ensures
that changes in the index reflect rent changes and not changes in composition,
which are likely to occur seasonally.
Copyright
This report and all data contained within is copyright Citylets. The information
contained within this report may be reproduced if the source is clearly identified.
About Citylets
Enquiries
Founded in 1999, Citylets is Scotland and Northern
Ireland’s original residential lettings portal & network
advertising more than 50,000 properties per year on
behalf of over 300 letting agents. Citylets Network
is an exclusive group of sites for property to rent
including s1homes, FindaProperty, Primelocation and
Globrix. Privately owned, Citylets is fully independent
of any estate / letting agent group, media or financial
organisation and is managed by its founding team in
the West End of Edinburgh.
Please feel free to get in touch with us if you would
like to discuss any aspect of this report or would like to
consider advertising property on the Citylets Web site.
Managing Director
Thomas Ashdown
[email protected]
Market Analysis
Dan Cookson
[email protected]
Citylets
21 Lansdowne Crescent
Edinburgh
EH12 5EH
Tel: 0131 467 4864
Fax: 0870 137 4576
Letting Agents
[email protected]
www.citylets.co.uk