By Mike White, of Martin & Co lettings agents in Norwich
In my blog of the 19th March, I flagged the upward pressure on rents for a variety of reasons. Well its here, now, happening to an investment property near you. And the principal reason, not to put too fine a point on it, there is a distinct shortage of good quality properties coming available to rent. Consequently, the biggest moan from letting agents around the country is the lack of supply. Nationwide, agents are reporting only handfuls of properties coming to market and they’re letting within the space of hours let alone days. The level of tenant demand is unprecedented, by way of example, the last two properties we listed both received multiple applications in the first day of listing. With a recent listing, we had to hold an ‘Open Day’ with over 20 prospective tenants viewing. Usually,at this time of year, there is a healthy turnover of tenants leaving and new ones coming along to replace them but at the moment, its one way traffic – plenty of new ones (mainly new entrants to the housing market and job relocators) but existing tenants seem to want to stay put. For landlords, now is a great time to be reviewing the level of rent your tenant is paying with a view to nudging it up somewhat. A well drawn tenancy agreement should allow you to do this. (If it’s not a well drawn agreement, change your agent!)
As I noted before, there’s going to be a lot of agents out there who are starting to hurt. They’re probably fairly new to lettings, have been concentrating on providing a tenant find service and have few managed properties on their books, so lack the continuity of an income stream. On the other hand they still have overheads to meet! Those who submit themselves to a form of regulation (NALS< ARLA< RICs) are bound to segregate clients money from their own and carry client money bonding. As for those that don’t, they could very easily be using client funds to keep themselves afloat, that is, until the clients money runs out as well. We’ve recently seen a very high profile case of this in Norwich where the agent managed to siphon off a large amount of money before running off into the night leaving a lot of distraught landlords behind.
For more information, please contact Mike at Martin & Co Norwich on 01603 766860.