With restrictions easing, people becoming more and more confident to get out and about, and people starting to get a better idea of their (at least short term) personal circumstances, we give a quick insight/update into how we have found (and are finding), the recent lettings market in SE16, and the surrounding areas which we cover.
Things are certainly not back to ‘normal’, but they have taken a step towards some kind of normality, especially with in person/physical viewings able to take place (where sensible and safe to do so and following ‘virtual viewings’). But, with a great deal of uncertainty still around for many, it will likely be a few more months until we have a better idea of how the rental market is likely to look for the remainder of 2020 and beyond.
Uncertainty in the market over the past 12 months or so (for many reasons, such as Brexit) had already meant that we were experiencing the highest percentage of tenants renewing (rather than moving/looking for a new property) on record. In times of uncertainty more people ‘hold off’, ‘wait to see’ and ‘stay as we are’, rather than confidently make moves/take actions without much thought. This pre-lockdown uncertainty, coupled with the inability to move during lockdown, meant that the rental property market all but ground to a halt.
Although, with restrictions easing, many people have started to get moving again, there are many who are still going through a great deal of uncertainty, and as such, remaining where they are until they have a better idea of what the near future holds for them.
In this difficult time, we have been advising both landlords and tenants to be as flexible and sympathetic as they can be towards one another and their situations, and to be open to agreeing to more short term extensions so to allow peace of mind until things are clearer. This approach, which generally benefits all parties, has worked well in the vast majority of situations and we have been very fortunate to have both understanding tenants and landlords.
As well as the tenants who have re-started their moving plans (which were on hold due to lockdown), we have seen a number of ‘new movers’ (tenants who have now decided to move because of lockdown, many of whom hadn’t intended to move pre-lockdown) come to the market, for reasons such as wanting more space, wanting outside space, needing a dedicated WFH (working from home) space, finding their living conditions/situations no longer suitable for them, or because their ‘new normal’ is unlikely to have such a need for them to be located in Zone 2 London, especially when they can get much more for their money a little further out.
The lockdown has for many meant a reassessment of what is really important in a home, especially with WFH looking like it will be a ‘new normal’, as tenants ask themselves if they really need to be as close to work (often paying a premium for such) or would proximity to open space, golf courses and family & friends make their lives easier/better.
Of course, there have been some tenants who have unfortunately been forced to move due to the current climate and their personal situation.
The combined results of the above has meant that demand from tenants is strong, but also that supply is also reasonably high, and so it is a balancing act for many landlords in terms of achieving the best rental amount possible, whilst wanting to find suitable tenants quickly so to minimise void periods.
Our advice to landlords on this, is to never compromise on the profile of the tenant, but be flexible on the requirements they ask for, the length of the tenancy they would like, or the rent they offer, of course within reason.
It is better to take on a few extra costs or a slightly lower rent than have the property sat empty, especially at a time when many other landlords are willing to be so. You don’t want your property to be constantly ‘left on the shelf’, as no matter how strong the rent you finally achieve is, you will likely never make up for the money not received for the time it was empty.
With furlough shortly set to taper down and come to an end, it is likely that we will get a better idea of the impact on our tenants, and as a result our landlords. This will of course be the case for many landlords across the sector, and if many tenants are forced to give notice and move, the supply of properties may outstrip the demand, especially if the number of jobs lost outstrips the number of newly employed as there will be fewer people ‘moving in’ than ‘moving out’.
We remain positive for a number of reasons, foremost because the areas we cover are great areas which offer a lot to residents and as such we believe demand will remain relatively strong. Short term small reductions in rents may result, but with the government appearing to be steadfast on keeping the economy as strong as is possible, this will only hopefully last for one rental term if and where needed.
Finally, we have been advising landlords that if your property is becoming vacant and it has been rented for a number of years, now may be a time to consider undertaking some works to bring your property back up to the level you would want it to be if you lived in it. For many, that is just a case of some TLC, re-mastic, touch up of paint, but for others, a little more is needed. With the new Electrical Safety Standards regulations, it is also paramount you have an inspection undertaken (along with any remedial works required) prior to entering into any new (including renewal) tenancy agreement, for more information; https://www.living-london.net/news/electrical-safety-standards-legislation.html
If you have any questions, are facing uncertain or difficult times which we can help with, or have a property you are looking to rent or sell, please do reach out to us for any advice required.
0207 231 0002 firstname.lastname@example.org