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Has Derby Reached Saturation Point?

Updated: Apr 2, 2023

After speaking with numerous HMO landlords and property investors it appears that there are currently more rooms available to rent then there are prospective tenants looking for accommodation. Does this mean that Derby has already hit saturation point?

Firstly i'd like to point out the obvious point that the rental market is cyclical. There are peaks and troughs like any business which is very much dependant on the time of year. As we have been investing in Derby coming up to 7 years now we have seen definite peaks and troughs in the market.

Those of you that had rooms available over Xmas may have noticed that after Xmas that the market had a bit of an uplift in tenants moving around, this tends to happen, we have found in Derby in the first couple of weeks of January. This is usually I believe to be for a couple of reasons.

Firstly families spend a lot of time together over Xmas, that normally wouldn't due to working etc. unfortunately they realise that either

a.) its time to move out of their parents or

b.) decide to split up as Xmas can be a stressful time of year or decide that their New Years Resolution is to make a change in their life and so decide to part ways from partners.

This tends to lead to a spike in people looking to move around in early January.

Coming into February - March the market tends to die down as this is when most people in our experience decide to plan for the year ahead, careers etc and they tend to sit tight until after Easter time. When the weather changes and the sun starts to come out attitudes and openness to a change tends to pick up. We have noticed this is when the market tends to pick up again based on previous years performance.

Coming into May time the market starts to really pick up and the months of June through to October tend to be the busiest periods especially for Houseshares with people moving out and moving in. There are definitely more rooms available then people looking right now (22/03/2019). There are currently 488 rooms available and 206 prospective tenants looking (Spareroom) in the Derby area. This means that prospective tenants have a choice of 2 rooms to choose from at least. Some of these tenants listed on Spareroom are archived tenants that have already found somewhere already but profiles are still listed so it is more like 2 in 3 rooms to choose from.

We have seen an increasing amount of investors getting into the HMO market in Derby over the last 2 years, bringing high quality stock to the market. When it gets to this point unless you have an outstanding product you start to compete on price in order to fill your rooms. My suggestion is to ensure that your rooms are being marketed to the best they can be or have a proactive agent on the case. If you have empty rooms and you know they could do with being upgraded or refurbished my advice would be to use this time when its quiet to make these improvements, redo your photos and ensure your rooms are dressed out before viewings take place. I have seen lots of rooms and properties that when you walk into look and feel like they've just been churned out. These types of rooms let easily when the market is 'hot' but when its quiet we find they are the last to be let.

So in answer to the above question has Derby hit saturation point? My response would be NOT YET but the market has become increasingly more competitive so in order to stay full you need to ensure that the tenants that you do get through your door do not want to look anywhere else. Spend time going over and upgrading any void rooms whilst it is quiet. If you are sat with lots of voids come the summer then it might be time to get out and let someone else spend the time and money getting them up to scratch. If you are in the top 10% of stock you should never need to compete on price or have long voids.

If you want to speak to us regarding suggestions on upgrading any of your properties or wants some tips on how to make your HMO's more appealing feel free to get in touch.

Houseshare Heroes Team

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