News

UK landlords are seeing an increase in tenant demand, especially from families

Almost half of all UK landlords are experiencing an increase in the demand for rental properties and this is expected to continue over the next 12 months. According to the latest research by specialist buy to let lender Paragon Mortgages, this rise in tenant demand is being driven by young people and families. We at NCJ have certainly seen this in and around Basingstoke. John Heron, Managing Director of Paragon Mortgages commented that ‘it is no surprise that rental demand is steadily increasing. With continued stress on the house stock driving prices up and tough affordability hurdles for would be buyers, a steady increase in rental demand was practically inevitable’. Young families are struggling to get on to the property ladder especially when school catchment areas rate so highly in their criteria and schools are becoming so competitive. Catchment areas of good schools mean inflated house prices and so many families are deciding to rent a property in those areas to prioritise their requirement for a good school. These families look for long term rentals to stay close to school and give continuity to their family life.

This increase in tenant demand is also highlighted by the increasing number of new residential lets in the UK being agreed before the existing tenants have even moved out. For landlords, tenants giving notice normally comes out of the blue and can be very stressful. Even with an agent like NCJ managing your property there is always that concern as a landlord, that you will be left with a vacant property. Every day a rental property is on the market without a tenant, the landlord is losing rent. However, recently these void periods have fallen, with a growing number of landlords having a new tenant lined up over a month before their existing tenant leaves. The average property is being let in 32 days which is the lowest figure on record. In 2015 so far, 33% of all new lets were agreed while the property was still occupied, up from 27% last year according to new research from Countrywide. No landlords want their property to be sat vacant but this increased demand means that Landlords are able to reduce the time a property is empty which can result in huge money savings. These savings come not only from not having to pay a mortgage for the property while it is vacant, but landlords are also more likely to achieve the highest rent if marketing and agreeing a deal before their existing tenants leave the property. This figure falls the longer a rental property is on the market. The buzz around a new property coming onto the market is usually the best chance the landlord will have to secure the tenant that will pay the advertised rental fee.

Leaving some time between tenants is advisable for maintenance purposes but at the moment this can be a matter of hours if the property has been maintained well by the existing tenants. Currently 10% of the time a new tenant moves in on the same day that the existing tenant moves out if you have an experienced agent like NCJ working for you and your property.