Landlords need to invest in improvements to attract the best tenants despite price adjustments
Although subject to regional variation and fluctuation, the overall picture of the rental market is one of stability, with many areas, particularly London, experiencing rent decreases since the start of the year.
According to Townends estate agents, the levels previously reached were simply not sustainable but as the market tightens, price adjustments are making it difficult for some landlords to justify re-investing in their properties.
With greater access to finance helping to encourage an improved sales market, it is commonplace to see rental prices fluctuate in accordance with this, which similarly can impact yields. Yet despite this, the level of tenant applicants has not waned meaning demand remains as high as ever, says Townends estate agents.
Caroline Kavanagh, Managing Director of Townends Lettings and Management comments “Landlords have had to be more realistic in the last few months and adjust their expectations and prices accordingly in order to maintain their competitive edge.”
Townends have experienced tenants that are more prepared to dismiss properties and wait in order to feel they are getting value for money, which has resulted in the level of viewings per property rising significantly in some cases. Some landlords are not necessarily in a position to justify much-needed improvements whilst rents are not rising, or are even falling.
“To attract the best calibre of tenants and avoid a void period, landlords need to be reviewing their properties objectively to ensure that what they are providing warrants the asking price. Even the smallest re-investment can make a big difference, not least that it increases ‘letability’ but helps to hold on to good tenants for longer.” says Caroline.
Ultimately, landlords’ income is still well above what was being achieved two years ago and those attaining anything above a 4% yield are getting a good return. Often much higher yields in the region of 6% are achievable but this is dependent on market conditions and mostly area specific.
“If landlords are unable to afford basic maintenance with rent levels as they are, then they are working their finances too tight. Price fluctuation within the rental market is the nature of the business and shrewd landlords will work this into their business model.”