Nearly half of tenants are cutting it very fine before finding a new place to live
New data from property marketplace, TheHouseShop.com, has revealed the incredibly short time span in which tenants expect to find and move into their new home.
The new data from TheHouseShop, which combines both private landlord and agency listings, shows that almost 1 in 3 tenants (31.2%) aim to move into their new home less than 2 weeks after they first make an enquiry to the landlord or letting agent online. With the figure rising to almost two thirds of renters (63.8%) who need to move into their new home less than 1 month after making their first enquiry.
Co-founder of TheHouseShop.com, Nick Marr, comments on the need for tenants to ensure they are thoroughly prepared if they expect to meet these tight deadlines:
“For the 1 in 3 tenants who are expecting to actually move into their new home less than two weeks after they first make contact with the landlord – they will need to ensure that they are responsive, organised and thoroughly prepared.”
“When a tenant makes an enquiry about a property online, it can often take 2-3 days before they receive a reply – especially if the property is being advertised directly by a DIY landlord who will usually have a full-time job to worry about, as well as their Buy To Let business. Even if the landlord replies to the enquiry instantly, the landlord and tenant will need to arrange a time for viewing that suits both parties, conduct tenant referencing checks, sign contracts, manage deposits etc. before the new tenants can actually move in.”
“Leaving just 2 weeks to get from start to finish is definitely achievable, but leaves little wriggle room to handle delays.”
Interestingly, the newly released data showed a clear and consistent peak in the number of last minute enquiries (i.e. where the tenant states they need to move in in under 2 weeks) during the month of September over the past 3 years. This would fit perfectly with the seasonal boom in the student lettings market as students desperately try to secure accommodation before their courses start in October.
When looking at the locations of the last-minute enquiries for September only, TheHouseShop discovered that the vast majority were concentrated around big university towns like Birmingham, Manchester, Edinburgh, Glasgow and Durham/Newcastle.
Younger renters are increasingly seeking out properties to rent direct from private landlords to cut out the letting agent middle man and avoid hefty admin fees. This could explain the particularly high volume of enquiries on TheHouseShop.com marketplace – which allows direct communication between its private landlords and tenants.
HOW UNDERSTANDING TENANT DATA CAN HELP LANDLORDS AVOID VOID PERIODS
Using this data, we can determine that the sweet spot for landlords advertising their properties is roughly 1 month before the date the property will next be available, as this will match the expected move-in time frame for the majority of tenants actively searching online. Move-in date is often an incredibly important factor for tenants, as arranging interim accommodation to plug a gap between properties can be tricky, time-consuming, stressful and, most importantly, costly.
As well as the cost of the actual accommodation, renters who find themselves stuck for a short time between properties also have to take into account the increased cost of removals, (as most will have to move their belongings twice), and the cost of storage.
However, tenants are not the only ones who can suffer financially from mismatched time frames. Void periods, where a rental property sits unoccupied, are a huge concern for landlords and can result in a significant loss of rental income.
Taking the average UK rental value for October 2017 of £909 per month (source: HomeLet Rental Index), a void period of just 2 weeks would cost a landlord £424.20 in lost rent.
While a loss of two week’s rent represents just 4% of a landlord’s total annual rental income, it can have serious consequences for Buy To Let mortgage holders, many of whom are working with tight margins.
Taking the example of a £200,000 Buy To Let mortgage, over a 25 year term, with a 2.5% interest rate – the landlord’s monthly payment on an interest-only deal would total £416.67. Therefore, a 2-week void period (£424.20 based on average UK rental value) would be roughly equal to a whole month’s mortgage payment and effectively wipe out the landlord’s profit for that month.