As the demand for rented property continues apace, prospective tenants are now seeking advice on how to secure a tenancy, and apparently it isn’t always that easy.
The news that the average rent rose once again in August, (the seventh month in a row) will convince many landlords that the time is right to purchase even more cheap landlord insurance as they look to expand their portfolios, and who can blame them. The August figures show that the average rent in the UK is now £712 a month, and the average rent in London is now well past the £1000 a month mark. And yet there is no end to the amount of people looking to get on the rental ladder.
Decent properties now often have several clients competing to secure the tenancy and prospective occupiers need to be on their mettle if they want to get their feet across the threshold. In many cases tenants are finding the best solution is to share a property with someone else. It certainly helps on the financial side of things and will possibly mean that you end up living in a better apartment in a better area.
Matt Hutchinson of Spareroom.co.uk explained that knowing what you want and where you are prepared to live will aid a successful outcome, he said: “You may be able to rent more cheaply if you can compromise by living a bit further out of town, taking a smaller room in a house-share, or sharing a room with your partner. To stand out from the competition, get your finances sorted upfront and be ready to commit when you see the property you want.”
That sounds like good advice but there are reports of gazumping in the London letting sector and tenants do seem vulnerable to market pressures at this moment in time.
The latest figures released from LSL Property Services regarding the buy to let market shows that the cost of renting in London dropped by an average of 2.3% last month.
The surprise drop now means that the average rent in the capital stands at £969, still almost 7% cent higher than the same time two years ago. The decrease was the first monthly fall in the whole of 2010 and brought a disappointing end to what has been a good year for most landlords. It was not just London where rents fell; the fall was reflected in most regions of the United Kingdom, with rents in December falling nationally by an average of 1.2%. Notable exceptions were the South West and the West Midlands.
David Newnes, managing director of LSL property services, said “December is traditionally a slower month for the rental market. Many prospective tenants are either away from home, or prioritise Christmas spending over budgeting to move.
“This year, the added Arctic weather temporarily dampened demand, deterring many renters from hitting the streets and viewing properties. But the recent slowdown in rents is down to landlords’ pricing strategies. Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period.”
The festive period had a negative impact on tenant budgets. In total 12% of all United Kingdom’s rent was either unpaid or late by the end of December, increasing from 9.7% in November. Unpaid rent came to a huge £276 million throughout the United Kingdom in December as the festive period took its toll on the finances of many tenants who felt an additional pinch from Christmas spending. It all means that property owners with landlord insurance will face some tough decisions very soon.
Rent arrears have been increasing since October as the public sector spending cuts start to bite in a lot of areas of the country. With unemployment looking set to increase as the year goes on and rents likely to increase in the spring, many more tenants will be at serious risk of falling behind with their rent.