Surveyors have begun downgrading rents when measuring up properties to inform lending for landlord mortgages, it has been claimed.
Dan Lee of brokerage Total Landlord Mortgages says increasing numbers of his landlord clients applying for mortgages at the moment are seeing their rental estimate down-graded by lenders’ surveyors, making it harder to get applications over the line.
This is particularly so for properties being purchased in central and inner London. The city’s central office districts are still almost ghost towns at the moment as many commuters continue to work from home.
This has weakened demand for rental property particularly within London’s pricey inner-city areas such as Finchley, Clapham and
Wandsworth, where many younger renters are shipping out to cheaper rural or suburban area as their employer’s offices remain close due to Covid.
“It is obvious from the lending decisions coming across my team’s desks that many lenders are getting nervous about rent levels both in London and in other urban centres where demand is weakening, and that landlords are accepting lower rents,” says Dan (pictured).
Hesays he believes landlords faced with tenants who have lost their jobs or been forced to take pay cuts are happy to drop their rents rather than lose a good tenant, while others whose tenants move out are being forced to drop their asking rents to get viewings.
LandlordZONE has spoken to one landlord in SW London who normally has to organise ‘open houses’ to deal with the dozens of tenants who cram in to view his flat in Balham when it comes up for rent.
But the landlord, who wishes to remain anonymous, says this time last month only one couple turned up to view the property and said they’d take it if the rent was dropped by 10%.