Understanding the Housing Market: Market Conditions

Before getting into details about housing, it is important to look at the "big picture". You are entering the housing market, maybe for the first time, and whether you are living in university of private sector accommodation, the main determinants of what you can rent will be decided by the particular factors of your local housing market.

• How expensive is it to live in your area?
• If there an accommodation surplus or a shortage?
• Is there enough good quality rented housing?       

These answers to these questions will determine when you should look for housing, how much you can be expected to pay and how much you can negotiate and what you can expect to rent. It is not good trying to drive a hard bargain with a property owner if they can let the property to others that afternoon and it is no good paying a high rent when there are plenty of cheaper, comparative properties available.

To give you some idea of the housing market here are a few indicators:

• Although rents vary the average cost of rents in the area are £79.95.
• This could be described as a high cost housing area.
• The number of students housed directly by the University of Birmingham is 2995.
  
• The number of students housed in the private sector is 4020 (approximately).

Average rents in 2008-2009 for different room types range as follows:

The average rental figures, however, are becoming increasingly unhelpful as a guide to certain sectors of the accommodation market. There is clear evidence that better quality properties command better rent levels. There are a significant number of students willing to pay above the average rent for a room in a good quality house.

The rental spreads are particularly telling in this regard. Below are the spread of rents per week per person in the different property types (giving the lowest and highest rent in each category):

It can be seen that the diversification of the market is now very wide. The current state of the housing market in terms of supply and demand is that there is a small surplus (this will vary according to the time of year because there is never a housing shortage at the beginning of the letting year).