Rental demand in August was rising at the fastest rate in two years according to Nick Cunning, Group Commercial Director at Countrywide.
Belvoir Mansfield have experienced this same surge of demand since September with properties having as much as six tenants requesting viewings within the first 5 days of marketing the property which means the golden phrase of ‘let on first viewings.’
What does this mean for Landlords?
This surge of demand will place upward pressure on the rental market, and thus values, in Mansfield. Rent reviews and higher re-let prices are therefore on the table, available to be taken advantage of as inflation (defined as the persistent rise in average prices as measured by the CPI, RPI & RPI-X) still affects your cost of living and should be reflected in your properties rental amount per month.
However…
You may have had a tenant who has been in your property for years, always paid on time and the property has been well-looked after, is it then fair to place a rent review (when applicable)?
We do have discussions with both Landlords and tenants to see if an agreement can be made with an increase in rent but you could be at risk of losing what some would deem a ‘perfect tenant.’
They may not be able to afford the additional monthly payment, which on an average rent of £500pcm would equate to an additional £8pcm (using July’s CPI) and £100 a year if their budget is tight.
On the flip side, if this tenant was to move out due to the increase it does not mean that another tenant will not be willing to pay the new rental pcm for the property.
For example, with a rent review the property would be up by around £10pcm, meaning £120 extra each year, but if the street’s rental values have increased by £20 or you feel this is the maximum achievable amount for the property, you can push this to £520pcm upon re-let, meaning an additional £240 per year.
For this to be effective, the new tenant would need to remain in the property beyond a year, (likely as an average Belvoir tenancy is around 20months) as you would face a re-let fee which could minimise the extra income you make in a year with a new tenant and rental value.
As with any business decision you make there are inherent risks, it just depends if your risk pays off. This is why we are here, to provide you with advice based on your current situation and expectations.
If you feel your current agent is not maximising your investment, or if you feel your agent has not considered talking to you about your property in this sort of detail do not hesitate to contact us here at the office on 01623 427 777, or email Michael at michael.keywood@belvoirlettings.com. We are here to assist you.
