22:00 PM, 19th August 2018, About 3 years ago 15
I have a theory, and I hope I am wrong!
Many Eastern Europeans came to the UK because they could earn more, and despite the higher costs of living they could send money home to their families.
However, a few years ago, every £1 they sent home converted to around €1.40 whereas it’s now closer to €1.10.
That’s just one factor. Another is uncertainty over whether they will be able to stay in the UK post Brexit. Another is the rising cost of living, rents being a prime example. Landlords are looking to increase rents to cover their own increasing costs.
Recently, I had an excellent Eastern European tenant move out of one of my properties to move to Germany. He said he had been offered a better opportunity. I didn’t think much of it at the time, save for the fact he was an excellent tenant and I was sad he was leaving. Nevertheless, I did my sums, decided it was worth keeping the property and advertised it to re-let. I didn’t even increase the rental price, which had remained the same since he moved in four years ago. At that time I had several applicants to choose from.
Two weeks after advertising the property I hadn’t received any enquiries. The advert was fine and I put it down to lethargy due to the hot weather. Nevertheless, I hate rental voids so I decided to drop the price by £80 a month. My thinking was that I would be inundated with enquiries, because mine is the best property in the area and I was advertising it at least £50 a month below the advertised rental price of inferior properties. The plan was to pick the best applicants and then go to final offers to try to get them to bid higher.
Another four weeks on and it still isn’t let. I had one applicant but he had a history of unsatisfied CCJ’s and I couldn’t get rent Guarantee Insurance on him. My view is that I would rather have an empty property than to risk taking on a tenant that an RGI provider considers too risky to underwrite.
Having done the sums again, it now transpires this property falls into the Return on Investment category I set for properties to sell when they become vacant.
It seems quite clear the amount of housing stock available for private rental is dwindling, due to onerous legislative policy. So why is my property still empty? My concern is that demand from tenants might be reducing even faster than supply of property available to rent, especially if migrant workers are moving out of the UK.
I appreciate one property doesn’t show a trend, so I’m interested to read others’ comments on thoughts and recent experiences.
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