Landlords Urged To Be More Realistic With Rental Asking Prices
With tenant demand for private rented sector (PRS) property easing due to the countdown to Christmas and New Year, it has come to light that many landlords have set rental asking prices that are beyond the affordability of many tenants.
London-based property consultants have advised landlords to be realistic when setting levels of rent and report that tenant affordability and an oversupply of properties are contributing to an ongoing correction in PRS rental prices in the capital.
Property consultant and estate agent, Cluttons, say that landlords who wish to let their properties need to be flexible on rent and should consider a reduction of 15-20% off current asking prices to avoid having a void property over the festive season.
Price-conscious tenants are also negotiating hard on new tenancy agreements or at renewal using the greater choice of rental properties as a bargaining tool to get better value for money, effectively driving prices down.
Lynn Hilton, partner for residential lettings at Cluttons, said: “Affordability is now central to the performance of Londons rental market. Landlords cannot achieve the asking prices they were getting twelve months ago and must now be far more realistic with rent reductions of around 15-20% in order to secure a let. Despite a small turn around in rents during the third quarter, our evidence shows that prices have begun retreating once more, highlighting the need for landlords to be realistic in their approach and expectations. Sensible landlords need to accept these reductions to minimise void periods. Greater choice across Central London is no doubt adding to tenants bargaining power.”
Landlords should be looking to receive a regular income from their buy to let properties every month not trying to make large amounts but getting enough to cover running and maintenance costs with a little profit as a bonus. Being realistic with rental asking prices makes more sense than asking more than the tenants can reasonably afford. Landlords can even get Rent Guarantee Insurance to ensure a regular income. With tenant demand hitting unprecedented levels earlier in the year, it is far healthier for the rental market to offer quality properties that are within the financial reach of the tenants.