Anyone that has been trying to find a property to let recently will know that the rental demand in Plymouth remains high. As soon as a property is listed on our website, our Facebook page, or Instagram we are inundated with enquiries. There is a definite shortage in rental properties which in turn has pushed rents up to an all-time high.
The competition is ferocious with good quality tenants desperate to secure properties, we as agents feel for applicants and understand the frustration of not being able get their foot in the door. The pace from releasing a property to it being Let Agreed is literally days, sometimes hours.
My advice to tenants looking for properties is to set up alerts on websites, register with letting agents and when applying for properties provide as much information as possible on your current circumstances to include income details. Have your documents ready, generally letting agents will require proof of ID (passports and driving licences). At Cross Keys Estates we like to give everyone a fair chance and encourage them to apply for properties via our on-line portal. All applications are acknowledged and viewed by landlords; we will then let all applicants know the outcome of their application.
Landlords are also feeling the pace having to ensure that properties are turned around quickly for new tenancies. There are many considerations for landlords to be aware ensuring that properties are compliant with Gas Safety Certificate, Electrical Installation Condition Reports and up to date Energy Performance Certificates. In October the new legislation regarding Carbon Monoxide Detectors will come into force. At Cross Keys we help our landlords to ensure that these safety checks are carried out and in place. We are encouraging our landlords to install CO2 detectors correctly now.
Obviously, the question is can this fast moving rental market be sustained. We don’t see it calming down anytime soon. Unless there is a mass influx in rental properties coming to the market in the next month or two, the trend of rents going up and properties letting within hours will continue for some months to come. So buckle up and ride it out!
With the price of property nearly at an all time high, a lot of people are looking at the rental situation instead of committing to purchasing, this gives them some more flexibility over where they can live as they can rent a property in an area that they probably couldn’t afford to buy. With the recently introduced tenant fee ban and the limitations that this is bringing to the residential lettings industry, time and conditions have never been better for a tenant.
In the past the traditional process for a letting agent has been to make a charge for processing a tenant’s application to rent. An “Assured Shorthold Tenancy” (AST) would be put in place by the agent with a minimum term of six months. After this initial six month period, the tenancy is still in place on a monthly basis until such time as either the landlord or the tenant puts in their notice. This is the most common way, however in the past some of the corporate companies used to issue two months notice to all their tenants on the fourth month so that the tenancy ends in line with the end of the six month period, even if the tenant had no intentions of leaving. When the tenant then said that they did not want to leave and were happy to continue the tenancy, the agent would charge them another administration fee to process a new AST. If the tenant decided that they did not want to incur the additional cost and therefore leave the property, the agent would remarket the property, claim a new fee from both the landlord and the new tenant that would take the property, a win win situation for the agent.
A lot of the big national lettings firms went around acquiring many of the smaller companies, in recent years, in order to swell the number of properties that they would have on their books and give them more opportunity to multiply their income from these recurring tenant fees.
This is the situation that the government is trying to stop, unnecessary repeat fees being charges to the people that are least able to afford them, the tenants. Cross Keys Estates have never used this practice, nor do we condone the use of it by other agents. It is unfortunate that the government has brought in this blanket ban instead of targeting the repeat fee companies. We are already seeing that some rent prices are being increased in order for some of these bigger companies to try to reclaim some of this lost income and the only people who will suffer will be the tenants as cost will soon be similar to the sales side and near to record levels. A small two bedroom house used to rent for between £550 to £595 per calendar month, now the same houses are currently getting a rental figure anywhere between £650 and £695 a month.
One myth that most people have about landlords is that they have lots of properties and make lots of money from the most vulnerable sector of the society by charging large rents. This for a large percentage of Cross Keys landlords is simply not true. A lot of landlords have maybe only one property that they rent out, some only have this because the down turn in the sales market when prices crashed meant that they would be in negative equity if they were to sell so instead, they kept the property and rented it out so that the rent would just about cover any outlay that they had on it, thus giving them the ability to buy another home for them to live in. This is still the case in some areas. There are, of course, some landlords that do have multiple properties and indeed do make a living from this industry, but it is my experience that nearly all the landlords that I have ever met or had dealings with, are really nice, kind and understanding people that are offering a valuable service to a country that has a very real housing shortage.
8 June, 2023
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