In the first six months of this year, 33% of all new lets were agreed before the existing tenancy agreement had come to an end – an increase of 27% over 12 months, according to research by a property services group. For landlords, this means that average rental rates can be boosted by as much as £35 per month.
With a tenant still in residence, landlords are under less pressure to negotiate. Coversely, an empty property gives tenants more bargaining power. Prospective tenants were able to knock an average of £21 off the asking price when the property was vacant. In the first week of a property being advertised, it was found that 98% of landlords were willing to accept an offer that fell below their desired monthly rate.
Void periods are clearly one of the biggest concerns for buy-to-let landlords, particularly among the increasing numbers of those who rely heavily on rental returns to support them through retirement.
Where a let has been agreed before the existing tenant had left the property, there is an average of just six days between the old tenant moving out and the new one moving in. The new tenant moved in on the same day as the existing tenant in 10% of cases.