Reply to: How negotiable are rental prices right now?

[Cyberman]

As a landlord I'm in no hurry to let if offered a lower price, I can afford to wait until something comes with the right price. If you were paying £260 on a mortgage and letting it for £600 a month, would you not do the same?

When we first advertised a number of people came round looking we just let them bid against each other - took about 10 minutes.

In the end we did not go with the highest offer but the couple both in full time secure employment, who seem nice enough. It's not always about the money. The house let was our first home and we want to ensure it's looked after.

Yep, it's worth taking a lower rent that is pretty much guaranteed to be paid than a higher rent that defaults. The quality of tenant and good references are paramount because you also want your house returned in tip-top condition.

[scooterscot]

As a landlord I'm in no hurry to let if offered a lower price, I can afford to wait until something comes with the right price. If you were paying £260 on a mortgage and letting it for £600 a month, would you not do the same?

When we first advertised a number of people came round looking we just let them bid against each other - took about 10 minutes.

In the end we did not go with the highest offer but the couple both in full time secure employment, who seem nice enough. It's not always about the money. The house let was our first home and we want to ensure it's looked after.

[Incognito]

Don't know who Andy Shaw is, wasnmt posting much before I started a new gig in jan 2009!

Andy Shaw is atypical of the 'levaraging to the hilt on your property' landlords that are now filling their pants as they realise that they can't get any more 85% LTV mortgages on their portfolios.

[Solidec]

Not a fan of the Andy Shaw guide to investment then?

Don't know who Andy Shaw is, wasnmt posting much before I started a new gig in jan 2009!

[Incognito]

Sad truth is that professional landlords with sound LTV on their portfoliio and longer term fixed rates are in positions to up their rent to maintain profitability even in this recessionary climate.

The hand to mouth landlords will mostly be gone from the market in the next 12 months as their sorry portfolios get repossessed due to the fall in their asset values.

Not a fan of the Andy Shaw guide to investment then?

[d000hg]

The best thing is to buy a house and eventually live rent free. I'm almost there, on 130 quid a month for a 4 bed detached.

I don't know if our mortgage will drop further following the latest interest rate cut, but it was down from £346 to £114 last payment.

We could move and leave this house empty for virtually no cost at all.

[Cyberman]

The best thing is to buy a house and eventually live rent free. I'm almost there, on 130 quid a month for a 4 bed detached.

[Solidec]

Yields are low because properties are overpriced, it is a simple as that!

Lots of landlords run on pissy sub 4% yields because they believe their property value will always go UP!, they don't really CARE abiout the yield, they are only concerned with capital gains. This is the biggest mistake amateur landlords make.

The intention of BTL was for profitability via good yields, 7-10% back in the late '90s. The bandwagoners all jumped on when the house price bubble really took off and ignored the indicators of sound investment, aka yields and mortgage interest to rental income ratios.

Simple fact is that rents have not gone up in the last 10 years at the same pace as house prices, and the reverse is now happening, that house prices are falling faster than rents.

In theory once housr prices are correctly priced, rents will normalise to suit, but whilst there is massive shortages in mortgage lending, rents will stay artificially inflated as mroe and mroe people are prevented from buying and forced to rent.

Sad truth is that professional landlords with sound LTV on their portfoliio and longer term fixed rates are in positions to up their rent to maintain profitability even in this recessionary climate.

The hand to mouth landlords will mostly be gone from the market in the next 12 months as their sorry portfolios get repossessed due to the fall in their asset values.

[d000hg]

Is it considered normal to ask a landlord for a 'reference' - e.g a current/ex-tenant you can ask about the landlord? I think it would be fair, even if it's not commonly done.

[Incognito]

Offer less for longer, if rent is £900 a month, offer £800 a month but lock yourself into a 12 month contract.

[BrilloPad]

Yes, that is the point of this thread... to know rules of thumb, since I'm more used to buying than renting.

It all depends on how fairly priced it was in the first place.

[d000hg]

When negotiating a starting point I think you can easily knock a couple of %age points off. However, a lot of landlords will be operating on tiny yields so YMMV.

But why is their yield so low? e.g in Durham you're looking about £800/month for something ok. Most have been owned over 10 years by the landlord, when they cost probably £100K max. More recent BTL landlords may struggle but what about long-term 'professional' landlords?

[Solidec]

4 months ago in my area where was a shortage of good properties to rent, landlords market, now its reversed, a glut of 2beds to rent and lots of competition for tennants means lots of wriggle room.

[Moscow Mule]

Yes, that is the point of this thread... to know rules of thumb, since I'm more used to buying than renting.

Last august, landlord wanted to up rent by 5%. He hadn't changed it for 3 years previous. We agreed to 4% on the basis that he'd fix some things in the house. Happy all round.

When negotiating a starting point I think you can easily knock a couple of %age points off. However, a lot of landlords will be operating on tiny yields so YMMV.

[Codejock]

Not sure there really would be much room for negotiation (realistically) but you can try...

After all, it's about supply and demand. Nobody's buying at the moment, but everybody needs somewhere to live.

(Spoken like a true Slum-Lord)