Recessions have some of the most unexpected effects. No two are the same.
As I have discussed on here before the biggest problem facing the rental market at the moment is the influx of people who never really wanted to be landlords in the first place.
Anyone who ever watched Sarah Beeny’s Property Ladder or any one of a number of similar shows will have seen that most people who go into the property development market want to fix the place up and make a quick sale for a fast buck.
Only a few choose to move into the highly specialised field of letting the property out.
This has changed recently though, with people being caught out by the sudden drop in house prices and then deciding to rent their properties. As you can imagine this has flooded the rental market somewhat and the law of supply and demand dictates that this in turn has forced rents down.
A recent report in the Financial Times shows that parts of London have seen the average rent price cut by up to thirty percent. A more general figure for the rest of the country estimates an average of a twenty percent drop.
Some tenants, recognising the strength of their position, even try to negotiate a new rate mid term. Often these tenants are threatening to use the six month break clause as leverage against the landlord.
As bitter a pill as it is to swallow, we need to recognise that currently our tenants have a lot of options. This needs to be reflected in the way we deal with them.
Remember the situation won’t last forever.
