Renting in London: as falling demand pushes rents down, landlords need to be more flexible to attract tenants

As tenants have more homes to choose between, the accidental landlord says landlords must become more flexible and hire a letting agent to avoid lengthy void periods.

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Victoria Whitlock22 May 2017

With a glut of rental flats, landlords have to be less picky over who they let to. This time last year, tenants were fighting over London properties, landlords were talking about putting up rents to compensate for looming tax increases and the buy-to-let market was hot, hot, hot.

Now it looks like the tables have turned and it’s tenants, not landlords, who have the upper hand.

Rents in some parts of London are being forced down due to falling demand and landlords are struggling to attract tenants.

A landlord I know has been looking for new tenants for two months but has attracted just a handful of viewers and has yet to receive any offers. It’s not surprising because literally dozens of similar two-bedroom properties within half a mile of her flat are being advertised on websites such as Rightmove and Zoopla.

Those viewers who have turned up have all seen lots of other properties before getting to hers, so they’re clearly not short of options. I think that in this sort of market, landlords need to pull out all the stops to fill vacant properties. And if that means spending more on marketing, so be it. I haven’t used a traditional letting agent to find tenants for years, but desperate times call for desperate measures. When my property becomes vacant I will hire at least one, if not several agents, to help market it.

There’s no reason why you can’t hire an agent and continue to look for tenants yourself. Most high street agents I’ve come across don’t mind and I think it’s a win-win situation for landlords. If you find tenants first, you won’t have to pay the agent’s commission. If they find someone, their fee will be money well spent.

Agents’ fees are tax deductible, which reduces the overall cost.

I usually use the cheap and cheerful online letting agent OpenRent to find tenants, which enables me to advertise on Rightmove and Zoopla, but with so many flats available, I think landlords need to do more to make their adverts stand out. Upad, another online letting agent, allows landlords to buy those “Premium” listings you see on Rightmove, which show three photos of each property instead of just one. You can also add a label, for example “Star Rental”, to big-up your property and grab some more eyeballs. It costs an extra £90.

I will also consider being a bit more flexible on the type of tenant I accept. I will be less sniffy about smokers and although I usually ban pets, I wouldn’t necessarily turn away someone with a cat or a well-trained miniature poodle. A tenant with a poor credit history will always be a big no because they are big trouble. But I will consider someone without references, assuming they don’t look too shifty.

If you find a tenant you like but you are unsure about their finances, you can ask them to provide a guarantor. Assuming they or their guarantor pass a credit check, you can also take out rent guarantee insurance for extra peace of mind.

With summer around the corner, the market could pick up again soon, of course. But until it does, landlords might have to work harder to fill their vacancies.