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What is happening to the lettings market?

Plenty of people ask me this question day after day and not just from the web site.  The trouble is that no-one can be sure of what is happening but we can be guided by what has happened.

The lettings market in London has fallen by about 15% since January 2nd 2002.  There are more and more properties coming onto the market and fewer and fewer tenants available.  Perhaps part of the reason is that interest rates are still very low and tenants are finding themselves in a more affordable position to buy.  However, another major factor surely has to be the massive amount of Buy To Let mortgages that have been taken up by both professional landlords and first time landlords.  The market place has been flooded and speaking to several agents in West London they have all reported having in excess of 70 properties available on their books to rent.

This does not mean that the lettings market is crashing by any means.  It does however mean that as a landlord you need to make sure that your property is better than anything else around at the same price.  Perhaps a little decorating or modernisation is required?

Those landlords who have contracts coming to an end also need to make sure that they can retain the tenant if possible - there will be instances whereby the tenant has to move on anyway.  Keeping the rent at the same price may not be a bad idea.  Take into account what other properties in the  area are fetching and you may find yourself in the fortunate position of keeping the tenant on at the same rent but in fact fetching more than if you let the tenant go and had to re-let the property.

Renting property should be looked upon as a long term investment.  Capital growth may well come into play as well as having your mortgage paid for by the rent.  Anything over and above the mortgage is a bonus!  Do not get greedy and believe that because somewhere close by is fetching a little more rent than your property that you should increase the rent.  Many landlords that I have come across in my days as a letting agent have told me what a wonderful property they have and when you tell them what they can expect to achieve as a monthly rent they turn and tell you they know they can fetch more - the obvious answer is "then why did you waste my time asking me around here."

Never get emotionally involved in your property!  It is a business!  You will make profits as well as losses and you must react to the present market conditions.  This is vital to the success of your business.  Admittedly the more properties you have the more you may be able to cover deficits from other properties, but keep an eye on the market. Reading through the local property pages will tell you what is going on.

Finally I would very much like to hear your thoughts about this article and this web site so that we can build up a new comments page - please post a message on our message board - CLICK HERE

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