p>A year ago rents looked like they would strengthen, stimulated by a reduction in stock of available rental properties and strong demand from renters. Now only a year on rents are weakening and the choice of rental homes for prospective renters is larger than ever before.
Landlords now have to compete against other landlords to win deals. The tenants are the real winners.
What is going on you may ask. A record number of properties are available to rent in many areas of the UK and Peterborough, my specific location, is one of those areas. The number of properties to let in Peterborough is at an all time high. This increased supply has in the main been fuelled by:
Developers and builders letting properties they are unable to sell
Would be vendors/sellers letting to enable them to move having received little or no interest from prospective buyers
Would be sellers letting as they are unable to sell as the likely sale value is lower than their mortgage
New investment buyers starting to build rental portfolios while sale values are low
Existing landlords increasing their portfolios while sale values are low
How can I prevent void rents
The number of new tenancies starting is up year on year but tenant demand is not keeping up with supply. Unsurprisingly tenants are more fussy and demanding. There is now even more reason why properties need to be presented well and why landlords need to be open minded to help broker deals with prospective renters.
Landlords who invest and are willing to negotiate will let first!
A new record low base interest rate of 0.5% means a growing number of landlords have significantly lower mortgage payments and are happy to drop rents to get their property(s) let ahead of other landlords:
A typical £100,000 interest only mortgage before December 2008 had a monthly cost of between £460 to £540 per month
Many landlords with trackers or standard variable rate mortgages are now enjoying monthly payments between £170 to £290 per month for a typical £100,000 mortgage: Typical savings of £250 to £300 per month
Some landlords are stuck in mortgage agreements with higher interest rates. These landlords maybe reluctant to drop the rent especially if it is lower than the monthly mortgage. If they don’t it could sit empty and lose them a whole lot more money!!
What can I do to let my property quickly?
Bring the rent into line with competitors or even lower; ensure the property is attractively decorated and well presented; ensure kitchens and bathrooms are up to date. Nearly all additional new to the market properties will look and feel very modern. Make sure the gardens are tidy and are well presented and don’t delay take action today.
And above all take advice from an experienced and regulated property letting agent.
Terry Lucking is the Managing Director of Belvoir Lettings Peterborough. www.belvoirlettings.com/Peterborough He started this business in 1999 and it is now the leading lettings agency in Peterborough, UK. He can be contacted on +44 (0) 1733 321500, email terry.lucking@belvoirlettings.com
