A whole raft of organisations have lately been chipping in their two penn’orth of opinion about what has been happening . . . or is about to happen . . . to rents. Some are reporting big increases, with more on the way, whilst others draw attention to the fact that rents are lower now in most parts of the country than they were in 2008 when the recession struck.
I suppose the one comfort is that the findings of a sensational national survey are likely to be very quickly followed by those of another completely contradictory study.
One recent report that did strike a chord with me came from a large national organisation that made the very sensible point that there are considerable regional variations and not all parts of the UK are likely to see a surge in rents.
It also made the point, that I already share, that a realistic approach to rents is going to be vital in the year ahead. Landlords need to understand the local market and be sensible about the rents that can be achieved in their area.
Co-incidentally, the Royal Institution of Chartered Surveyors has said that it is detecting a reluctance on the part of prospective tenants to pay increasing rents.
At DDM Lettings our five branches in Northern Lincolnshire are experiencing a rental market that the cosmologists would describe as ‘the Goldilocks Zone’ - neither too hot nor too cold. We never see the huge and rapid increases in rent, nor do we experience the big falls.
Our market is remarkably stable, with strong demand for private rented houses and flats, pretty evenly balanced by the supply most of the time. Currently there is a good choice of property for tenants to consider, without there being anything approaching a glut.
That is a point for property owners to consider, particularly when a survey grabs the headlines about rents rising by 8%, as one recent study claimed has been happening in East Anglia. (The national average increase, it reported, was a more modest 4.8%.)
It almost goes without saying that hiking the rent on a property beyond its true market worth is completely counter-productive. A property does not have to be empty for very long for any advantage to be lost.
An over-priced house or flat can be vacant between lettings for four or six weeks – or more - rather than the two weeks – or less – that a place with a competitively set rent will be empty. That’s going to be really bad news for the return on the investment.
So such rent increases as there are should be modest and there have even been situations involving loyal tenants, people who have been in a property for several years, where the DDM Lettings advice to the landlord has been not to increase the rent at all. A hike, particularly a big hike, can be the thing that pushes people to look around and move out. The situation for prospective tenants in the area is excellent at the moment. As I mentioned earlier, there is a good choice of available property, both houses and flats, and some very competitive rents. Indeed prospective tenants may even find themselves able to take advantage of the deals that are available on some rented property.
Here at DDM Lettings we are again leading the way with a new initiative called ‘DDM Move-in-Deal’ . . . which basically involves bundling together all the costs involved in taking a property . . . and cutting the price quite substantially!
For example: Someone taking a fairly typical terrace house with a rental of say £400 would ordinarily be faced with finding a months rent (£400), a surety deposit (£600) and admin fees for credit checking and the like (£100). So they would have to find £1,100 at the start of the tenancy.
If there is a ‘DDM Move-in-Deal; available on the property the total would be typically £749, so a saving of £351, almost 32%. This obviouly makes the property more attractive to tenants in this competitive market and can reduce a void period by at least a full month or more.
Sadly Move-in-Deals are not available on all of the DDM Letting properties on our books but if the house or flat that you are interested in does have such a deal on offer there is a saving of hundreds of pounds and at a very useful time, when you are moving into a new home.
Lastly, just a quick reminder about the second DDM Property Auction Event of the year that will be held as usual at the Forest Pines Hotel in Brigg Thursday 12th, registration 6.30pm. Catalogues are available to download on line at www.ddmresidential.co.uk, request from your local branch or call 0845 4 599 499. There are 41 properties available and some properties have starting bids with no reserves at just £1.00 !!!!!!!!