When many other areas in the estate agency world are beginning to wind down for Christmas, which seems to have come rather early this year, the Lettings market is a frenzy of activity. Historically, the last two weeks in November and the first two weeks of December are four of the busiest weeks in the Lettings calendar as some tenants race to get settled before Christmas and others sign up now to move early in the New Year.
2010 has been a pivotal year for the Lettings industry. We have seen rents increase month on month as demand has increasingly outweighed supply. There has been a sharp sway from it being a tenant’s market to firmly a landlord’s one – landlords call all the shots. Not only can they hold firm on their rental expectations, but also the terms of the tenancy. Mutual breakclauses are becoming more and more common when, this time last year, it was a tenant only luxury. Tenants are guaranteeing longer terms and indeed, are renewing rather than moving on, and rental increments on renewals have ranging from 8% to as high as 40% in some instances. Void periods are lower than they have been for many years and bidding wars and gazzumping are becoming common practice.
Gone are the days when Letting agents were backroom staff – they are now key players in the estate agency world. ARLA Letting agents rushed to be licensed to prove their professionalism and commitment and at last the public are really recognising the benefits of appointing these agents and seeing their money protected. Would you book a holiday through a non-ABTA agent? No, and you should not let your property through a non-ARLA agent.
New legislation came into effect in October increasing the Assured Shorthold threshold from £25,000 to £100,000 per annum bringing many more tenancies under the control of the Housing Act 1988, with the added necessity to register deposits in one of the three Government approved schemes.
Buyers became tenants too due to the lack of stock in the Sales market and their need to move on leading to renting has become acceptable in the English psyche, particularly as the average age of the first time buyer is now mid-30’s. Landlords rely more heavily on their agents both to negotiate their renewals in order to ensure that their rents are in line with market conditions and that they are complying with the ever increasing legislation coming across from our European neighbours.
My predictions are that it will be even more of the same in 2011. Despite the gloom, doom and ramifications of the financial crisis in Ireland, the Central London Lettings market seems to be ‘bullet proof’. The City is employing from overseas and these employees need housing during their secondment to London. I believe rents will continue to increase but landlords cannot afford to be complacent and need to present their properties in the best possible condition. Tenants will continue to expect 24/7 service from their Letting agents and I believe that a Letting agent’s role will become increasingly demanding throughout 2011.
May I take this opportunity to wish our many readers a very merry Christmas and a happy, healthy and prosperous New Year.
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