Tenants are leaving an incredibly short time span in which to find and move into their next rental home, according to a new study by property marketplace TheHouseShop.com.
The data shows that almost one in three tenants (31.2%) aim to move into their next home less than two weeks after they first make an enquiry to the landlord or letting agent online. That figure rises to almost two thirds of renters (63.8%) who need to move into their new home less than a month after making an initial enquiry.
The Co-Founder of TheHouseShop, Nick Marr, stresses the need for tenants to be thoroughly prepared if they expect to meet these tight deadlines: “For the one in three tenants who are expecting to actually move into their new home less than two weeks after they first make contact with the landlord, they will need to ensure that they are responsive, organised and thoroughly prepared.
“When a tenant makes an enquiry about a property online, it can often take two to three days before they receive a reply – especially if the property is being advertised directly by a DIY landlord, who will usually have a full-time job to worry about, as well as their buy-to-let business. Even if the landlord replies to the enquiry instantly, the landlord and tenant will need to arrange a time for viewing that suits both parties, conduct tenant referencing checks, sign contracts, manage deposits etc. before the new tenants can actually move in.”
He adds: “Leaving just two weeks to get from start to finish is definitely achievable, but leaves little wriggle room to handle delays.”
Interestingly, the research shows a clear and consistent peak in the number of last-minute enquiries during the month of September over the past three years. This fits perfectly with the seasonal boom in the student lettings market, as students desperately try to secure accommodation before their courses start in October.
When looking at the top locations for last-minute enquiries for September, TheHouseShop discovered that the vast majority were concentrated around large university cities, such as Birmingham, Manchester, Edinburgh, Glasgow and Durham/Newcastle.
The study also found that younger tenants are increasingly seeking out properties to rent directly from private landlords to cut out the letting agent middleman and avoid hefty admin fees. This could explain the particularly high volume of enquiries on TheHouseShop, which allows direct communication between private landlords and tenants.
Using this data, TheHouseShop has determined that the sweet spot for landlords advertising their properties is roughly one month before the date the property will be next available, as this will match the expected move in timeframe for the majority of tenants searching online. The move in date is often an incredibly important factor for renters, as arranging interim accommodation to plug the gap between properties can be tricky, time consuming, stressful and, most importantly, costly.
As well as the cost of the actual accommodation, tenants who find themselves stuck for a short time between properties also have to take into account the increased cost of removals, as most will have to move their belongings twice.
However, tenants aren’t the only ones to suffer financially from mismatched timeframes. Void periods – where a rental property sits unoccupied – are a huge concern for landlords that can result in a significant loss of rental income.
Taking the average UK rent price for October 2017 of £909 per month, a void period of just two weeks could cost a landlord £424.20 in lost rent.
While a loss of two weeks’ rent represents just 4% of a landlord’s total annual rental income, it can have serious consequences for those with buy-to-let mortgages – many of whom are working with tight margins.
Taking the example of a £200,000 buy-to-let mortgage over a 25-year term with a 2.5% interest rate, the landlord’s monthly payment on an interest-only deal would total £416.67. Therefore, a two-week void period would be roughly equal to a whole month’s mortgage payment, and effectively wipe out the landlord’s profit for that month.
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