Information released by the Rental Index earlier this month revealed a surprise. There has been so much concern over the Housing Crisis, and the rising cost of both rent and mortgage payments. Yet for the first time in eight years, the month of May saw a drop in rental price increases. Average rent for new tenancies in the general market came in at £901, some 0.3% lower than the same month for last year. London experienced the highest drop with a 3% reduction in rent.
The Gap Between Cost and Rental Income
The rental price rise has slowed overall throughout the year following a turbulent 2016 which saw a 4.7% increase. Is it time to review your rent? You probably already have students for the next academic year but if not, you should consider lowering your rent – the reason you’ve not got tenants is likely that the rent is too high. While lower rents may be good news for all tenants, it’s a matter of concern for landlords stuck between keeping rents affordable and covering their rising costs.
Examine the Lay of the Land
What are your competitors, contacts and friends presently charging? Are they charging less for this academic year than last year? Have they found it more competitive or students determined to haggle? Do students feel facilities inadequate for the cost of the rent? Students are more demanding today than they ever were and expect a certain standard of living. If yours is not up to the quality they expect for the price then you should either upgrade or be prepared to lower your price.
Be Flexible
It bears repeating that students are getting pickier with their rental properties. They will look for any reason to attempt to negotiate on price. Whether you agree to do so is up to you but if it’s getting late and students are seeming unimpressed, perhaps it is time to consider reducing the cost of your property. How much you charge is not just about what your competitors are charging or what you should be charging, but also about what students are willing to pay based on what property is offering.
Consider the Pros and Cons of Your Property
This should be under constant review anyway as students from each generation expect more from their rental property than the last generation. What might have been a great selling point five years ago may be the standard now. Each pro should be a reason for putting the rent up or keeping it the same and every con should lend serious credibility to reducing your rent. With so many resources at your fingertips including Pads for Students database, you should be able to find the rent level in this volatile market that is beneficial to both you as the landlord and your prospective student tenants.