The power held by tenants is growing across the UK, as new research indicates 61 per cent of buy to let investors are willing to postpone rent rises or offer properties below market value in a bid to secure reliable renters.
Of the investors surveyed, 66 per cent of those letting out at below market rate were prepared to accept a reduction of up to £100 a month, with 16 per cent willing to sacrifice between £100 and £200 a month and six per cent even 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 a report by research firms BVA BDRC in partnership with the National Landlords Association – cited by Leeds Building Society – some 18 per cent of property owners are renting more than three-quarters of their properties below market value.
“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” explains Jaedon Green, director of product and distribution at Leeds Building Society.
“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.”