Long periods of vacancies haunt UK rental market
Void periods for rental property in the UK remain high and still pose a threat to landlord portfolios but have stabilised, according to new figures from the National Landlords Association.
In March 2010 some 52% of landlords had experienced voids in the previous 12 month period, down from 55% in the last three months of 2009, the research shows. There was also a fall in the average duration of voids from 19 days to 17 days.
But despite a marked increase in tenant demand and a reduction in supply as reluctant landlords are able to sell up, there is still only a slight improvement in rental voids, the organisation said.
And a continuing lack of available mortgage finance for first time buyers, as well as the requirement for higher deposits, means that would-be buyers are renting for longer.
The strategy adopted by landlords for covering voids continues to vary depending on portfolio size. Although larger landlords are most able to offset the costs of voids with rent from other properties, some 43% of landlords claimed to use personal savings to plug the shortfall in meeting mortgage repayments.
‘No landlord likes void periods. They can end up being very costly indeed. Although incidences of voids have levelled off, over half of the landlords questioned have experienced voids in the past year, albeit for a shorter length of time,’ said David Salusbury, chairman of the NLA.
‘The best way to deal with void periods is to avoid them altogether. As with many issues in the letting of residential property, open and respectful channels of communications between landlords and tenants will pay dividends,’ he added.
The NLA say getting the price right is important and it might be worth accepting a lower rent in order to secure new tenants and not only must the property be in good repair but landlords now have to think about added extras such as garden furniture, flat screen televisions and broadband.
The internet is also playing an increasing role with the overwhelming majority of tenants looking for their next move using the internet. So photographs need to show the property in its best light.
‘If you have good existing tenants, then think very hard before choosing to put the rent up. In the current market, as long as the rent is covering any mortgage repayments, you might want to think twice about rocking the boat,’ it also advises landlords.
‘Your tenants are your clients. If you take your lettings business seriously, then you should be available and quick to respond to your tenants’ concerns. Organising repairs professionally and taking time to treat the smallest of problems shows the tenant you value them. In turn, they should treat your investment with respect,’ it adds.