The power held by tenants is growing across the UK, as new research indicated 61% of landlords are willing to postpone rent rises or offer properties below market value in a bid to secure reliable renters.
Of the landlords surveyed, 66% of those renting at below market rate were prepared to accept up to £100 a month reduction on market value, with 16% willing to sacrifice between £100 and £200 a month and 6% discounting rent by over £200 per month.
Brexit, economic uncertainty and an increased supply of rental properties were highlighted by landlords as reasons which could influence tenant demand in the future and make good quality tenants even more valuable.
In a bid to secure reliable tenants for properties, some landlords are foregoing rent increases and effectively subsidising tenants. According to BVA BDRC Landlords Panel study 18% of property owners are renting more than three-quarters of their properties below market value.
Jaedon Green, Director of Product and Distribution at Leeds Building Society, said: “Landlords are well aware of the impact Brexit and ongoing economic uncertainty could have on tenant demand. Research suggests landlords are actively seeking to retain and/or secure reliable tenants.
The commercial rationale for landlords to invest in the quality of their rental property has never been stronger. Quality properties typically result in higher tenant satisfaction which results in fewer voids and improved rental yields over the longer term.
This is positive news for tenants. The negotiating position for reliable tenants is strengthening as landlords are actively taking steps to maintain the security of regular payments from dependable tenants, even if that means reducing their monthly incomings slightly. Responding to tenant and landlord needs, we’ve introduced our Easy Start BTL mortgage, which provides the opportunity to pay nothing for the first three months, while preparing the property to let.”