De­mand reaches an all-time high in the let­tings mar­ket

Yorkshire Post - Property - - FRONT PAGE - Richard Chap­man

THERE has never been a stronger let­tings mar­ket. De­mand has reached an all-time high with those strug­gling to ce­ment a foot on the prop­erty lad­der look­ing to the rental sec­tor to find their next home.

There has also been an in­crease in peo­ple who have sold their home and want to rent be­fore de­cid­ing on their next pur­chase.

In these un­cer­tain times those who would nor­mally buy prop­erty are now rent­ing as they are un­sure of what the hous­ing mar­ket will do.

The re­sult is a de­mand for rental prop­er­ties of all types, though the most pop­u­lar are two- and three-be­d­room ter­raced houses and three- to four-be­d­room semis. Rents typ­i­cally range from £600 to £695 per cal­en­dar month for a ter­raced house and £695 to £850 for a semi-de­tached. They of­fer af­ford­able yet of­ten spa­cious accommodation and ap­peal to a broad mar­ket place in­clud­ing sin­gles, pro­fes­sional cou­ples and fam­i­lies.

The good news for those with ru­ral prop­erty is that the rental mar­ket has seen a real surge in tenants look­ing to move away from the hus­tle and bus­tle of towns and city cen­tres. For­tu­nately, there has been a real surge of large prop­er­ties, such as de­tached fam­ily homes, farm­houses, coun­try cot­tages and even large es­tates, up for let.

Many of these homes have been for sale and not sold and so their own­ers have de­cided to gen­er­ate a rental in­come rather than a sale and it is a healthy, con­sis­tent re­turn. It is not un­com­mon to see larger prop­er­ties rang­ing be­tween £1,500 and £3,000 per cal­en­dar month suc­cess­fully let.

The rise in those choos­ing to let rather than sell has seen “reluc­tant land­lords” go on to rent out their prop­erty on a per­ma­nent ba­sis as they re­alise how prof­itable the let­tings sec­tor can be. In many cases, these peo­ple go on to buy more prop­er­ties to let, adopt­ing a fresh phi­los­o­phy of “bet­ter to have your money in prop­erty than in the bank”.

How­ever, there are pit­falls and it is vi­tal that land­lords fol­low these guide­lines:

Choose an ARLA (As­so­ci­a­tion of Res­i­den­tial Let­tings Agents) reg­is­tered agent. These agents have to ad­here to cer­tain codes and by­laws and will en­sure that ev­ery step of the let­tings process is car­ried out to the cor­rect stan­dard. Arla reg­is­tered agents also have to be trained to a high level to reach ac­cred­i­ta­tion.

Make sure that all tenants are fully credit checked and ref­er­enced and, where pos­si­ble, meet your tenants to check them out per­son­ally. It can of­ten help to have an un­der­stand­ing of what your tenants do for a liv­ing, why they are rent­ing and to grasp an idea of how long they are look­ing to rent for. Find­ing the right tenants will re­duce the risk of rent de­fault and dam­age to your prop­erty.

Make sure that you and your ten­ant sign a ten­ancy agree­ment. Typ­i­cal agree­ments are As­sured Short­hold Ten­ancy Agree­ments and are usu­ally for a min­i­mum pe­riod of six months. Hav­ing a signed agree­ment al­lows you to serve the cor­rect no­tice should you need your prop­erty back in the fu­ture.

Make sure that you have a pro­fes­sional in­ven­tory and sched­ule of con­di­tion and make sure that you take a dam­ages de­posit and that it is lodged with one of the ac­cred­ited gov­ern­ment bond schemes. It is im­por­tant to know that you have some in­sur­ance should your prop­erty be dam­aged dur­ing a ten­ancy.

Ask about rent guar­an­tee in­sur­ance – these poli­cies are de­signed to help you pay your mort­gage should a ten­ant de­fault on rent pay­ments.

Make sure you are not pay­ing too much to an agent for find­ing a ten­ant. Typ­i­cal fees should be about 50 per cent of the first month’s rent for a ten­ant-find ser­vice and be­tween eight and 12 per cent per month for a fully man­aged ser­vice.

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