Although rents have been increasing, landlords indicate that they would rather have good tenants who pay on time than receive higher rental income. A new survey by Hunters estate agents says that the top priority is to find tenants who pass all the necessary reference checks. Other priorities are to quickly re-let properties with 41 per cent of landlords saying that finding a long-term tenant is a higher priority than finding those who would pay higher rents. No landlord wants to see a property stay empty and not, therefore, earning any rental income at all.
Prices have been rising across England, which can be attributed to many factors such as house price increases or the increase in stamp duty which came into effect in April. The cost of the average rental in the UK for new tenancies, excluding Greater London, rose by 2.3% to £779 per calendar month in the three months to July. London, of course, is still the most expensive place in which to rent property, with the average rent on a new tenancy now standing at £1,599.
So the evidence from this survey suggests that landlords are simply passing on additional costs to tenants rather than increasing rental margins.
It makes sound business sense to let a property to someone who will not cause any damage; who will pay the bills; and who will pay the rent on time. It might be that the property doesn’t necessarily yield a short term profit but covers the buy-to-let mortgage and agent’s fees. At the very least it is not standing empty with the landlord having to cover the costs and there is the prospect of longer term capital growth.
London and the South East remains buoyant, with a significant increase in corporate tenants moving to the region, according to Jackson-Stops & Staff estate agents. London and Surrey are popular areas for overseas corporate tenants. Office for National statistics (ONS) data backs this up by revealing that the number of people born outside of the UK but working in the UK is up by 367,000 annually to 5.4 million. This suggests that there is greater demand from global companies moving their employees to commuter-belt districts which are close to the Capital.
Corporate clients are desirable and are highly sought after by landlords who want long-term, stable tenants. These corporate clients will be looking for safe locations with good public transport links, restaurants, leisure activities and gyms. Many may bring their families with them and so will require easy access to decent schools and health centres. These requirements need to be borne in mind when investing in buy-to-lets for corporate clients.
A great deal of time can be saved by researching online for the right properties in the right areas. In checking average house prices with Zoopla or Rightmove, you can also use Google Maps to take a virtual tour of the area. You can check out the commute time to central London as well as find out about house prices, crime rates and schools in the area on commutefrom.com, and you can use speedtest.net to check the broadband speed in the area.