In many regional markets, much current demand for country houses to rent is from tenants hoping to buy within a year (an existing trend fuelled, a little counter-intuitively, by a slower sales market in the South East). The problem is that it could be anything from four to twenty-four months before the tenant no longer needs the house, so no one can know when, and on whom, additional costs and stresses will arise. Worse if, as so often, it is assumed that the ideal rental term for the landlord is one cast in stone, whilst that for the tenant is ‘just as long as we need’, both sides start from a guarded position.
In practice, the situation is almost always more nuanced. What the landlord really wants is a responsible tenant and security of income, whilst the tenant simply wants a relatively modest degree of flexibility. Both sides often have other factors to consider, too, such as major maintenance works and school holidays. By revealing these and looking to accommodate each other’s requirements, simple arrangements such as tailored minimum notice periods, or taking income from re-letting into account and, most of all, frequent communication, can work wonders in facilitating agreement.
Impact of Tenant Fee Ban
Lack of transparency and trust played a big part, too, in the saga of tenant fees and their banning from 1st June 2019. For us, the impact has been positive, because our offices either didn’t charge fees, or did so without using them as a source of income. Problems arose because of hidden profiteering. Faced with a more transparent market, tenants now approach it with greater confidence, which is good for all. Meanwhile, Jackson-Stops lettings teams whose rivals were relying on tenant fees for a big part of their income (Northampton appears to be a hot spot for this) are enjoying an influx of new business from landlords whose previous agents are trying to charge them more.
Modest rent rises
As reported in earlier editions, with landlords facing extra costs, many industry professionals – including the RICS – had predicted that rents would rise sharply as a result. We questioned this and, indeed, have since seen rents rise essentially in line with inflation. Backing this up, according to the ONS, “Rental prices for the UK, excluding London, increased by 1.5% in the 12 months to June 2019.”
Real wage increases might soon fuel rent increases. This, though, underlines that it is what tenants will pay, not landlord costs, which sets rents. In a market as transparent as this one, the landlords and agents who prosper, are those whom tenants can trust.