How useful is calculating ‘£ per square foot’?

 

I am currently helping a landlord find a suitable rental property to add to his portfolio. I suggested an array of two-bedroom houses in Tangmere, which, amongst other things, I highlighted as offering excellent value when considering their ‘£ per square foot’. The landlord was a little baffled as to what this was and why it was important. 

I explained that £ per square foot is one of the metrics I always use when analysing a potential property purchase (property price divided by total square footage of the property) as it gives an idea of the value for money you are getting.

Obviously, you have to consider the quality of the ‘square foot’ you are calculating i.e. an immaculate property in the best part of town will rightly cost more on a square foot basis than a rundown shack in a less desirable area.

When comparing similar homes in the same neighbourhood though, it can be a good gauge as to how much you should be paying for a particular property. Most estate agents will just talk about the number of bedrooms as an indicator of size, but this is an unfair comparison when a large bedroom has been split in two or a living room has been redesignated as a ‘bedroom’.

It can also become a powerful negotiation tool. Being armed with the knowledge of comparable properties is one thing, but the £ per square foot metric brings a level of objectivity to negotiations (although it does ignore garden size). 

Back to the search at hand…

There are currently four traditional ‘two-up two-down’ houses in Tangmere, all with a garage and within 500 yards of one another. They are priced at £249,500, £259,950, £270,000 and £300,000.

Based on that, it seems pretty obvious which one to plump for right? This is where my trusty £ per square foot calculation comes in handy.

The ‘cheapest’ of the two-bed houses would be a decent buy at £249,500; and with a footprint of 605 square feet means it would cost £412 per square foot.

Spending £10,450 more will get you an additional 50 square feet, bringing the overall cost down to £397 per square foot.

The £270,000 option is the smallest of them all (at 588 square feet). That equates to £459 per square foot, placing it bottom of the pack when considering ‘bricks for your buck’.

The most expensive of the four (priced at £300,000) is also the biggest thanks to the addition of a 90 square foot conservatory. Whilst conservatory space is normally less ‘valuable’ than original house space (traditional conservatories are cheaper to add on than bricks and mortar), this one warrants using its total 745 square feet when calculating a cost of £403 per square foot.

The eagle-eyed amongst you will note the most expensive house is NOT the outright cheapest when it comes to £ per square foot (going against the narrative I was surely spinning). But, when you factor in each property’s condition and the works required to bring all four houses up to an immaculate standard, you soon realise it does in fact warrant the (small) extra expense when using this metric. 

Furthermore, this is where I believe those who are ‘in the know’ could use the traditional headline figures to work for them. Give it a little time and, having been overlooked as ‘expensive’, I suspect a price reduction is likely before it eventually sells. 

Also, do you think it will be easier to negotiate the price of the already ‘cheap’ two-bed houses downwards, or do you think it will be easier to state the fact that, at £300,000, this one seems pretty pricey considering you can get a similar two-bed house round the corner (albeit in need of some work) for £50,000 less? 

By using this knowledge to your advantage, I think you could end up bagging a bit of a bargain by getting the best of the comparable properties on offer for a better price; ultimately meaning that it would become the cheapest on a ‘£ per square foot’ basis.

If you are thinking of buying a rental property and would like me to crunch the numbers on it to ensure you are maximising your investment, please get in touch.

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Landlords - what you should check before arranging a viewing

Demand for rental property is at record highs, with literally dozens of prospective tenants wanting to view and snap up a property within hours of it being marketed. A recent house I listed had over 50 enquiries within 48 hours; but clearly it can only be let once! Processes therefore need to be put in place to avoid wasting the time of both yourself and some of the interested tenants who either won’t be suitable for the property or will find that the property is not suitable for them.

The first port of call is to understand who will be living at the property, as there may be restrictions on the property’s usage from both a legal and/or practical perspective. For example, I recently had two couples and a friend wanting to share a three-bedroom house. Housing five adults would mean more wear and tear on the property than many of the other potential applicants but, even more importantly, it would mean the landlord having to apply for an HMO license from the council (at a cost of £1,422!). Conversely, I had two friends wanting to rent a two-bedroom apartment; not a problem I said, but are you happy with the second bedroom only being a single? They weren’t, and thus checking this saved me and them the bother of viewing a flat that wasn’t appropriate for their needs.

You should also speak to the tenants about their financial situation; doing so now will save conducting a viewing with tenants who might fall in love with a property, only to find they can’t pass the referencing. You should ask whether they have any credit issues that might affect their application, along with understanding their income to ensure it passes the affordability criteria set out by referencing agents (typically requiring an annual household income of 30 times the monthly rent). If an issue is identified, you could consider whether an alternative solution can be found, such as having a guarantor or for them to pay rent upfront.

Finally, understanding the tenants’ situation is often useful. If the property is vacant and therefore available to rent immediately, it is beneficial to find tenants who can move in as promptly as possible. On the other hand, if the property is not ready to move into for a couple of months, then it’s little good showing it to someone who needs to move within a fortnight! You may also discover that the prospective tenants are only looking to rent for a short period of time, which may not fit with your preference for a long-term tenancy.

All being well, I then send the prospective tenants a video walkthrough of the property, which is recorded from a first-person perspective as if they were viewing the property (including commentary). This shows far more than a description, photographs and floorplan can do alone, and helps to ensure the property is suitable for them. This has greatly cut down the number of viewings whereby the prospective tenants weren’t already chomping at the bit to take the property (saving everyone’s time).

This all means by the time I’m viewing a property with potential tenants it is highly likely that they will want the property (assuming it matches the video) and that I will want to, and be able to (from a referencing point-of-view) rent it to them.

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Preparing your property for Winter

The following tips can be applied all year round but they’re particularly relevant at this time of year as it gets colder, darker and wetter outside.

Familiarise yourself with your property

Ensure you know where the fuse box, gas safety valve and water stop valve are and how they operate, in case of an emergency (I provide a house guide to my tenants with this information and also show them when they move in).

Keep on top of basic maintenance

Check roofs and gutters for slipped or damaged tiles and for any leaks. Check overflows and pipework for any leaks as well as damp smells or flaking paint, which may indicate a hidden problem.

Bleed the radiators and check the pressure of the boiler to see if it needs topping 

   up.

Avoid condensation

Build-up of condensation can be more prevalent in winter as more heating is used, clothes are dried inside and there is a tendency to want all the windows shut.

All this moisture in the property needs to go somewhere and will invariably attach itself to cold surfaces (exterior walls/window surrounds) and create unsightly 

   condensation/mould patches.

  Keep windows open throughout the property, particularly in bathrooms and kitchens 

  and especially during and after showering/bathing and cooking. Use extractor fans 

  where fitted and wipe down any wet surfaces after using the shower/bath.

Don’t turn the heating off completely

This is very important to prevent the freezing of the water system and expensive burst pipes. It’ll also help in the fight against condensation, which thrives on a changing temperature.

The easiest solution if you are planning to be away from the property is to leave 

   the boiler on and set the thermostat to a low temperature e.g. 12 degrees.

Fire safety

Do not overload electrical sockets with appliances and Christmas lights as this can cause a fire hazard. Avoid using candles, particularly near Christmas trees, decorations and curtains.

Test all smoke and carbon monoxide alarms to ensure they are working correctly.

I believe prevention is better than cure, which is why I pre-arm my tenants with a 'winter maintenance guide' at the beginning of their tenancy and re-issue it as winter approaches. You can download this short guide, free of charge, from www.crjlettings.co.uk/winter-advice

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Energy efficiency proposals for buy-to-let reintroduced

The Labour Government has confirmed that landlords will need to have at least a ‘C’ energy efficiency rating from 2030 via their EPC (Energy Performance Certificate). This comes less than a year on from when Rishi Sunak dropped this requirement, which was due to come into force in 2028 (having previously been delayed from 2025).

This hasn’t come as too great a shock to landlords though, as I noted last year when the policy was dropped. At that time the Labour party had already said they would reintroduce the policy if they came to power (which became ever more likely to happen as Sunak’s time at the top went on). Regardless of who was in power, it seemed to be a matter of when targets would be brought in rather than if. It is a shame though that the policy has come back in its original ‘one size fits all’ criteria, which seems overly simplistic for such a complex subject.

If you’re unfamiliar with EPC’s, they show a property’s energy efficiency on a scale from A (highest) to G (lowest). They are valid for ten years and you can easily look-up a property’s certificate online by visiting www.epcregister.com.

Whilst every rental property has needed an EPC since 2008, from April 2018 it became unlawful for new tenancies or tenancy renewals to proceed in a property with a rating lower than an E. From 1st April 2020, these rules expanded to ALL tenancies i.e. no property with an EPC rating below an E should currently be tenanted (although some exclusions apply). Those who fail to comply with these laws face significant financial penalties; from £5,000 all the way up to £150,000 for repeat, long-term offenders.

Updated lettings legislation also stipulates that if you don’t provide the EPC to your tenant before they let the property, you are unable to serve them with a Section 21 notice should you want to regain possession of the property.

It is therefore a good idea for landlords to check their property has a valid certificate in place with at least an E rating and that the tenants were given a copy before any tenancy agreement was signed after 2020. If you use a letting agent, be sure they are on top of this for you, as ultimately it is the landlord that faces the consequences (and fines) for not abiding by the legislation.

It should be noted that, legally, the EPC is only needed at the point of marketing and at the start (or any renewal of) the tenancy. So, if the EPC expires during the tenancy, it doesn’t technically need to be renewed straight away. This is something of a grey area though, as how can you prove the property satisfies the minimum rating if you don’t have an in-date certificate? Also, you need an in-date EPC to be able to serve notice to tenants, so it is wise to have one in place in case this becomes necessary.

Until they were dropped last year, most landlords had accepted that the more stringent energy efficiency rules were incoming, with some having already spent sizeable sums in preparation for the anticipated legislation. A study by Shawbrook Bank at the time suggested 80% of landlords were already prepared for the ‘C’ rating requirement. 

Nevertheless, that same statistic means around 550,000 landlords weren’t prepared! 

Further worrying research that has been published estimates it would take until 2042 for all rental homes to become compliant with the new rules; some 12 years after the 2030 target. This is for several reasons; most notably the extensive works many properties would require to actually achieve a C rating, alongside a lack of qualified tradespeople able to undertake the works (whilst also supposedly building 370,000 new homes a year…).                                                                                                              Critics of EPCs argue they are inaccurate and largely based on (flawed) assumptions anyway. They also appear non-sensical when certain upgrades (most notably energy efficient electric heaters being installed in place of old storage heaters) actually lower the perceived energy rating! Some ‘improvement’ works are also known to negatively affect the structure of a property and lead to damp; such as the fad of ‘insulating spray foam’ being used in lofts a few years ago, which is now being shown in the media as leading to condensation issues such that the properties affected have become unmortgageable and unsaleable without costly removal.

Most are also of the opinion that once the C rating is commonplace it will only be a matter of time before the goal posts are moved to a required ‘B’ and then an ‘A’ rating. Meanwhile, why is it only rented properties that need to meet the criteria, as opposed to all properties (both residential and commercial).

On the flip side, many landlords are responsible and environmentally conscious enough to realise there are benefits of improving energy efficiency without being forced to do so. Rising energy prices in the past couple of years has focused the minds of many tenants, such that they are now actually taking note of the EPC rating prior to choosing a property. Previously, so few people paid attention to the EPC that there was little value in improving the energy efficiency of the home, nor to then instruct and pay for another assessment to prove it. 

Similarly, the value of a property should benefit from being more energy efficient; with 74% of those looking to purchase within the next two years advising that a home with an EPC rating of an A or B is more attractive than less energy efficient homes. There are also a growing number of ‘green’ mortgage deals, with incentives or improved terms reserved for those with the most energy efficient homes.

I suspect the reintroduction of the enforced energy efficiency proposals will now mean a swathe of properties being sold rather than let. This will be especially true of older properties and leasehold properties, whereby the required improvements are simply impossible to implement, or are far too costly to justify at a time when landlords’ margins have already been squeezed. I guess those properties will be sold to an owner-occupier who doesn’t need to meet the minimum requirements, whilst those in the rental market will face a further supply shortage and, inevitably, higher rents.

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Getting your property ready to rent

In my last article, I listed the basic things you’ll need to put in place before you can legally let your property. Assuming they’re all sorted, the next thing you’ll need to do is get the property ready for marketing and viewings. With that in mind, here’s a few things to consider to get the property ready to rent:

 

Consider improvements

We’ll assume any necessary repairs are done and the house is watertight and fully functioning. That being the case, you could now let it…but will anyone want it? It’s a lot easier to undertake improvements before a property is tenanted, and doing so is likely to attract a better, longer-term tenant, who may be willing to pay a higher rent for a nicer home.

 

So, are the windows and heating up to scratch? How old are the bathrooms and kitchen? Is there a decent shower and suitable kitchen appliances? Could the walls do with re-decorating or the flooring upgraded? It may seem boring but a crisp neutral décor is easier on the eye and provides a blank canvas that tenants can see themselves living in. 

 

Factor in the cost to undertake these works versus the uplift in the property’s value and the gains in tenant satisfaction, longevity of their tenancy and increased rental income.

 

De-clutter

Taking photos of a property with lots of ‘stuff’ in it won’t show it off to its full potential. It’ll also put people off when they come to view the property as it will make the rooms feel smaller and less inviting. Simply clearing surfaces and stacking things away neatly can bring some much-needed calm to a property.

 

Dress the rooms

Whilst the majority of properties are let unfurnished, you can at least straighten the lightshades and pull back the blinds or curtains to let in the most amount of light. If you are providing furniture though be sure to dress the rooms so they reflect who you’re targeting i.e. setting the dining table makes more sense for families than it does sharers.

 

Keep it clean

No one wants to rent a dirty property, so make sure it’s spick and span so it’s looking its best. Don’t forget the outside spaces either; make sure the frontage is clean and tidy, ready to make a good first impression. Tidying up the garden and creating a low maintenance space will make it more inviting, rather than looking like something tenants will have to be working on every weekend.

 

Once the property is up to scratch and made to look its best, it’s time to call in the professionals and get it valued, photographed, measured-up and marketed. A well-presented property that is priced correctly will stand above those on the market that have had less care taken with them and, as a result, should make finding tenants that bit quicker.

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Preparing your property for Winter

The following tips can be applied all year round but they’re particularly relevant at this time of year as it gets colder, darker and wetter outside.

Familiarise yourself with your property

Ensure you know where the fuse box, gas safety valve and water stop valve are and how they operate, in case of an emergency (I provide a house guide to my tenants with this information and also show them when they move in).

Keep on top of basic maintenance

Check roofs and gutters for slipped or damaged tiles and for any leaks. Check overflows and pipework for any leaks as well as damp smells or flaking paint, which may indicate a hidden problem.

Bleed the radiators and check the pressure of the boiler to see if it needs topping 

   up.

Avoid condensation

Build-up of condensation can be more prevalent in winter as more heating is used, clothes are dried inside and there is a tendency to want all the windows shut.

All this moisture in the property needs to go somewhere and will invariably attach itself to cold surfaces (exterior walls/window surrounds) and create unsightly 

   condensation/mould patches.

  Keep windows open throughout the property, particularly in bathrooms and kitchens 

  and especially during and after showering/bathing and cooking. Use extractor fans 

  where fitted and wipe down any wet surfaces after using the shower/bath.

Don’t turn the heating off completely

This is very important to prevent the freezing of the water system and expensive burst pipes. It’ll also help in the fight against condensation, which thrives on a changing temperature.

The easiest solution if you are planning to be away from the property is to leave 

   the boiler on and set the thermostat to a low temperature e.g. 12 degrees.

Fire safety

Do not overload electrical sockets with appliances and Christmas lights as this can cause a fire hazard. Avoid using candles, particularly near Christmas trees, decorations and curtains.

Test all smoke and carbon monoxide alarms to ensure they are working correctly.

I believe prevention is better than cure, which is why I pre-arm my tenants with a 'winter maintenance guide' at the beginning of their tenancy and re-issue it as winter approaches. You can download this short guide, free of charge, from www.crjlettings.co.uk/winter-advice

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This article was featured in...

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Energy efficiency proposals for buy-to-let scrapped

There has been a lot of talk this past week about the environmental policies dropped by Rishi Sunak as he pushed back the UK’s net zero carbon emissions goals. Amongst the policies scrapped was the proposal that all rental properties would need to have a ‘C’ energy efficiency rating from 2028 (previously delayed from 2025) via their EPC (Energy Performance Certificate). 

If you’re unfamiliar with EPC’s, they show a property’s energy efficiency on a scale from A (highest) to G (lowest). They are valid for ten years and you can easily look-up a property’s certificate online by visiting www.epcregister.com.

Whilst every rental property has needed an EPC since 2008, from April 2018 it became unlawful for new tenancies or tenancy renewals to proceed in a property with a rating lower than an E. From 1st April 2020, these rules expanded to ALL tenancies i.e. no property with an EPC rating below an E should currently be tenanted (although some exclusions apply). Those who fail to comply with these laws face significant financial penalties; from £5,000 all the way up to £150,000 for repeat, long-term offenders.

Updated lettings legislation also stipulates that if you don’t provide the EPC to your tenant before they let the property, you are unable to serve them with a Section 21 notice should you want to regain possession of the property.

It is therefore a good idea for landlords to check their property has a valid certificate in place with at least an E rating and that the tenants were given a copy before any tenancy agreement was signed after 2020. If you use a letting agent, be sure they are on top of this for you, as ultimately it is the landlord that faces the consequences (and fines) for not abiding by the legislation.

It should be noted, that legally the EPC is only needed at the point of marketing and the start / any renewal of the tenancy. So, if the EPC expires during the tenancy, it doesn’t technically need to be renewed straight away. This is something of a grey area though, as how can you prove the property satisfies the minimum E rating if you don’t have an in-date certificate? Also, you need a valid EPC to be able to serve notice to tenants, so it is wise to have one in place in case this becomes necessary.

Until last week, most landlords accepted that more stringent energy efficiency rules were a given, with some having already spent sizeable sums in preparation for the anticipated legislation. A study by Shawbrook Bank suggests 80% of landlords were already prepared for the 2025 EPC rule change (although that suggests around 550,000 landlords weren’t!).                                                                                                                                                    This effort and expenditure might not all be in vain though; it is likely the minimum rating will be increased at some point in the future. Indeed, the Labour and Liberal Democrats parties have already said they will reverse these reversals if they get the opportunity…meaning the need for a C rating by 2028 could still become a reality if they come to power (a General Election is due next year…).                                                                                                                      Besides, improving the energy efficiency of your buy-to-let not only has a benefit to the environment but also to your tenants. Rising energy prices in the past couple of years has focused the minds of many, such that tenants are now taking note of the EPC rating prior to choosing a property. Previously, so few people paid attention to the EPC that there was little value in improving the energy efficiency of the home, nor to then instruct and pay for another assessment to prove it. 

Similarly, the value of the property should benefit from being more energy efficient; with 74% of those looking to purchase within the next two years advising that a home with an EPC rating of an A or B is more attractive than less energy efficient homes. There are also a growing number of ‘green’ mortgage deals, with incentives or improved terms reserved for those with the most energy efficient homes.

So, although the ‘stick’ of having to ensure all rental properties meet at least a C rating rather than the current E rating on the energy efficiency scale has gone, there are a growing number of ‘carrots’ as to why landlords may wish to adopt this regardless. This seems sensible to me, as there were some homes (e.g. older, solid brick properties, which have stood the test of time despite their perceived shortcomings) that simply required too great a cost to warrant the works (which could also cause damp and defects to the property). 

For now, the scrapping of the energy efficiency proposals should mean there is one less reason for landlords wishing to sell their property. This is especially true for those with older housing stock, who feared the cost implications for them to meet the standards was simply not worthwhile, perhaps showing the proposal in its original form was unrealistically simplistic with its ‘one size fits all’ application.

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How much rent should you charge?

In contrast to popular belief, the automatic assumption amongst landlords is not “as much as possible!”

When assessing what rental figure you should market your property at, you need to consider what is available at the time you are marketing. It is not sensible to think “well, it rented for £800 a month a couple of years ago and rents are up 10% according to that London based newspaper, so I guess £880”…when another apartment in the block with a sunnier aspect is being marketed at £850pcm.

You should also consider the situation you find yourself in. If you’ve just received the keys to a new buy-to-let, you should price it cautiously so that it lets as soon as possible. If, on the other hand, you’ve just received your month’s notice from your current tenants, you have a little time to ‘test the market’, safe in the knowledge you have a month to ‘tweak’ things if needed.

Having said that, I still wouldn’t advise automatically extracting the maximum figure you deem possible from tenants. By offering a well-presented property at a realistic or favourable price, you will get to choose from a wider pool of people. Besides, even if you do find tenants who sign up for a bumper rental figure in excess of what the property is reasonably worth, how long do you think they’ll stay put?

Consider the fact that tenants will typically stay longer in a property they feel they are getting a good ‘deal’ from. This will help you to minimise your tenant turnover, wear & tear and void periods, all of which will help you make more money in the long-run (and with less hassle). Since the tenant fees ban, the door has been opened even wider for tenants to up and leave at little cost, which they’re likely to do if they see something similar to rent at a better price.

Another reason to be realistic from the start is that the first few days of marketing is when you’ll get the most interest. If it’s priced too high initially tenants may dismiss it and even when it’s reduced they’ll still disregard it having seen it a few weeks earlier, remembering they’d previously rejected it “for some reason”.

Bear in mind the actual marketing figure you use too. I’ve written previously how people search the property portals online and filter properties by price. For example, you’ll lose out on a huge number of potential tenants that would be happy to pay up to £1,000pcm if you try and push the asking price to £1,050pcm.

I’d prefer to be conservative on the rental price and receive it 100% of the time from long-term tenants who appreciate living there, rather than squeezing the most I can from someone who ends up either not being able to afford it or deciding it’s not worthwhile staying.

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Landlords: is it time to increase the rent?

I should stress that I don’t see it as ‘the norm’ to increase the rent as a matter of course. I particularly dislike tenancy agreements that have onerous automatic rent increase clauses built into them. In fact, I would far rather reward a tenant by not increasing the rent (assuming they have paid on time each month and looked after the property), thus retaining them for a longer period.

Unfortunately, an increase in legislation and the negative impact from changes in taxation towards landlords has altered my view on this in recent years. Adding to that are the significant interest rate increases over the past year (some landlords have seen their buy-to-let mortgage payments triple!) alongside the fact that rents on new tenancies are soaring; all of which makes it hard to justify not increasing the rent at the moment. There are, however, rules about how this is done, as well as the need for compassion to navigate what is a sensitive subject.

The rent cannot be increased on tenancies that are still within their ‘fixed-term’ period (normally 6 or 12 months) without the tenant’s agreement. For those that fall outside this, the rent can be increased by the landlord by using a ‘Section 13’ document with at least one month’s notice (although I typically give 6-8 weeks’ notice to ease the process). The rent cannot then be increased for at least another year (unless the tenant specifically agrees to it).

A rent review will assess what the market rate is for the property by analysing what is currently on the market (just like you would when you initially let a property). You may also consider the tenant’s conduct throughout the tenancy, their payment record and affordability. Showing comparable properties to tenants can soften the blow of a rent increase if they are unaware of the going rate, especially when rents have increased quite a lot. Any increase should be ‘fair and realistic’ and ideally made in agreement with the tenant, otherwise they can refuse the increase and ask a tribunal to set the rental figure.

Tenants should be aware though that these rent tribunals can set the rent at a higher amount than the landlord had originally requested! This is why tenants also need to be realistic when subjected to a rent increase if it is in line (or better than) the market rate for the property. In one such case in May of this year, a landlord had asked to up the rent of their property in Surrey from £1,260pcm to £1,300pcm. The tenant disputed this and took it to the rent tribunal…who set the rent at £1,540pcm!

I typically recommend meeting tenants half-way in regards to the amount of any rent increase i.e. keeping it below market value so they have an incentive to stay in the home they have looked after and paid rent for throughout their tenancy. Ultimately though, this is the landlord’s decision; some will never increase rents (thus not ‘rocking the boat’ so tenants stay longer; aware of the re-let costs and possible need for refurbishment if the current tenant were to leave), some want the maximum rent at all times (likely seeing a higher turnover of tenants / risk of affordability issues or resentment from tenants arising), whilst others take the middle ground. 

The average rent in Chichester is currently £1,300pcm, which is an increase of 8.3% compared to the £1,200pcm average figure from one year ago. This is slightly below the average increase seen across the UK, which has been 10.4% in the last 12 months (with UK rents averaging £1,229pcm overall / £1,027pcm excluding London).

Despite quickly rising prices, rental homes are continuing to let at speed and many landlords are still being met with long queues of prospective tenants wanting to view and rent their property. As market rents have increased greatly, many landlords are taking the opportunity to offset some of the financial impact from increasing legislation, taxation and interest rates by passing on rent increases to current tenants. The sad reality for these tenants is that if they don’t want to pay the increase there are a number of prospective tenants chomping at the bit to move in (who will perhaps pay even more for the property!). 

If you’re a landlord and would like a ‘rent review’ for one of your properties, or if you’re a tenant facing a rent increase and would like an impartial opinion on its validity, please get in touch and I’ll be happy to provide assistance.

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Landlords - what you should check before arranging a viewing

Demand for rental property is at record highs, with literally dozens of prospective tenants wanting to view and snap up a property within hours of it being marketed. A recent house I listed had over 50 enquiries within 48 hours; but clearly it can only be let once! Processes therefore need to be put in place to avoid wasting the time of both yourself and some of the interested tenants who either won’t be suitable for the property or will find that the property is not suitable for them.

The first port of call is to understand who will be living at the property, as there may be restrictions on the property’s usage from both a legal and/or practical perspective. For example, I recently had two couples and a friend wanting to share a three-bedroom house. Housing five adults would mean more wear and tear on the property than many of the other potential applicants but, even more importantly, it would mean the landlord having to apply for an HMO license from the council (at a cost of £1,333!). Conversely, I had two friends wanting to rent a two-bedroom apartment; not a problem I said, but are you happy with the second bedroom only being a single? They weren’t, and thus checking this saved me and them the bother of viewing a flat that wasn’t appropriate for their needs.

You should also speak to the tenants about their financial situation; doing so now will save conducting a viewing with tenants who might fall in love with a property, only to find they can’t pass the referencing. You should ask whether they have any credit issues that might affect their application, along with understanding their income to ensure it passes the affordability criteria set out by referencing agents (typically requiring an annual household income of 30 times the monthly rent). If an issue is identified, you could consider whether an alternative solution can be found, such as having a guarantor or for them to pay rent upfront.

Finally, understanding the tenants’ situation is often useful. If the property is vacant and therefore available to rent immediately, it is beneficial to find tenants who can move in as promptly as possible. On the other hand, if the property is not ready to move into for a couple of months, then it’s little good showing it to someone who needs to move within a fortnight! You may also discover that the prospective tenants are only looking to rent for a short period of time, which may not fit with your preference for a long-term tenancy.

All being well, I then send the prospective tenants a video walkthrough of the property, which is recorded from a first-person perspective as if they were viewing the property (including commentary). This shows far more than a description, photographs and floorplan can do alone, and helps to ensure the property is suitable for them. This has greatly cut down the number of viewings whereby the prospective tenants weren’t already chomping at the bit to take the property (saving everyone’s time).

This all means by the time I’m viewing a property with potential tenants it is highly likely that they will want the property (assuming it matches the video) and that I will want to, and be able to (from a referencing point-of-view) rent it to them.

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