Impact of Swansea City Relegation on the Rental Market
With the devastating but sadly unsurprising confirmation that Swansea City Football Club have been relegated from the Premier League, many landlords will now be wondering how this will impact the rental market in Swansea.
The Economical Cost to Swansea City
One of the major benefits of being a Premier League Club are the vast sums of money paid out from the competition's broadcast revenues. Overseas TV rights coupled with domestic TV rights and commercial revenue have lost the team up to £97 million next season.
The Club are likely to part ways with several of their bigger earners, and any new squad members will join on lower salaries. Players from Swansea's successful Under-23 set up will be promoted to the senior squad to replace some of the departures.
Fallout across the City
Obviously, many of the more luxurious apartments in the Marina and SA1 Development have been let to players, but there are also a number of apartments in these areas as well as the Copper Quarter that have been home to staff associated with the club, academy, community trust, and other divisions.
Over the past 5 years, prices in the Marina have risen thanks to players and personnel being able to afford the higher-end rents. This in turn has driven up prices even for smaller apartments in these areas, and the city more generally.
The majority of the Swansea Squad are thought to have clauses in their contracts that would see them take wage cuts in the event of a drop into the championship. It is inevitable that cuts will also be made to employment, and hard choices taken by staff to move to other Premiership teams.
This could lead to these properties becoming vacant over the next few months, meaning there would be a potential influx of high-end apartments becoming available in a market where demand is dwindling.
Average rental price for a luxury apartment in SA1
Currently, there are thirty-five 2 bedroom flats on the market for over £1,000pcm*. The average (mean) price of one of these premium properties is £1,302.77pcm.
If they start to reduce in price, prices on smaller apartments will have to be reduced, too.
The wage needed to pass affordability checks on an apartment with rent of £1,300pcm is £39,000 p/a. According to Swansea Council, the average (median) wage for full time workers in Swansea stands at £499.60 a week - £25,979.20 p/a**.
Landlords need to be considering what they can do to make sure their Marina, SA1, and Copper Quarter apartments are looking their absolute best in order to command the highest rentals they can as competition grows fierce.
If you have an apartment you’re considering marketing or need to re-marketing for let and you would like some advice on how best to present it, you can click here to request a free property consultation with McCartan.
*according to Zoopla, as at 25/05/18
** as at 25/05/18