10 secret strategies to drive higher rent in London for 2020
December 19, 2019
So, what’s the secret to achieving the top end rent for your London postcode? We’re about to tell you..
We hear landlords often ask us this question, and likewise we see properties on the market for full whack but guess what? They sit there for sometimes months at a time because they are simply not worth it.
The London rental market is changing, a lot to do with the fact that it is absolutely saturated. However, landlords (and certain agents) still fall in to the trap of thinking ‘I own a XX bed property in XX of course the demand is so high I can charge whatever I want for it’. But that is simply not the case.
Demand is high for all types of properties, whether it’s something slightly lower quality or the highest of the high. If you’re a savvy landlord or agent you will be able to let it in London IF it’s priced correctly and advertised accordingly. There are certain strategies to this, which we will explain later, but in essence the demand is there for a property that offers value to the tenant(s).
If you’re struggling to let your property for market rate, or for a higher than market rate we’ve got some handy tips for you to look at below to help you along the way to achieving it:
1. Assess the condition of your property or ask someone impartial to..
- Whenever we do a valuation with an individual landlord we often see a lack of impartiality. This is through no fault of their own, it just happens after time. If you have bought a property 30 years ago, and completed one or two refurbishments in that time it is not enough for a long term rental. The property will be looking worse for wear, tired and probably grubby even if you’ve done your best to keep on top of it with light painting and remedial maintenance.
- You need someone to come around to the property with an expert eye, completely impartial and give you advice on how to improve the condition as well as how to make it more attractive to the current tenant type looking. EG back 30 years ago it was probably the style to have a separate living room and kitchen, now the younger generation enjoy open plan or semi open plan living. Does that 15 year old sofa finally need replacing? Do those white square tiles need redoing in the bathroom? How old is the carpet? Are the walls still a tired magnolia that have 15 layers of paint on since 1992? Ask an agents opinion, they are the expert in the market and a few small changes can make the world of difference in price acheived.
2. Advertisement strategy
- It’s debated amongst agents and property professionals how best to advertise a property, and really depends on your area. Again, we’d recommend asking an expert like an agent, but do your research. How many properties do they currently have advertised, and how long have they been advertised for?
- We would always recommend professional photographs as an absolute minimum when preparing to advertise your property. A description that pops out at people rather than the generic location / property comprises of etc etc snooze snooze. Describe the unique features of the property, and if your property doesn’t have any (highly unlikely) tell a story about the previous tenants and what they enjoyed about living there.
- Where to advertise depends again on your property but as a minimum we advertise on Rightmove, Zoopla, OpenRent, Gumtree, Facebook Marketplace, SpareRoom, Badi, Onthemarket.com and amongst our 3500+ strong network.
- Staging is also a common technique for higher end properties especially, though there is absolutely no reason why you can’t do it for a lower or medium end property. Who wants to look at an empty bedroom with an unfurnished living room? We often forget that the majoirty of renters are not property professionals, and can’t ‘see’ behind an unfurnished or unstaged property photo. Make it homely and make it somewhere people can imagine living, we guarantee your enquiry inbox will thank you for it.
3. Pricing strategy
– This again is hotly contested. I know certain agents that will slash the advertised price compared to what it’s worth just to get the demand flooding in. They will do one viewing with around 20 – 30 groups and then go to blind bids which makes everyone applying panic because they want the amazing flat of their dreams that they thought they could never afford but seemingly can (or could have).
- Another strategy is to advertise it higher than market rate and then invite offers as to what the prospective tenant thinks its worth. However, this is not advised if you want to rent your property quickly or it is currently void. A higher advertised price means that prospective tenants searching will miss out when looking at the portals eg if their top end is £2000 for the market rate of a two bed in your area but you’ve advertised at £2200 expecting to achieve an offer of around £2000 – your property will simply not be seen by the tenant when they enter their search criteria.
- Maybe this is revolutionary in London, but why don’t we advertise what the property is worth? If people are searching for a higher quality of property they will be searching for a higher price, if they are searching for lower quality or cheaper they will search cheaper. Appeal and be seen by your target market, and agree a tenancy with tenants that are suitable for your property – not by mass panic and manipulation. The likelihood is that you will end up finding a tenant that can afford it, is happy and therefore will stay longer – the dream no?
4. Assess your area and the type of tenant demand and adapt
- Where in London is your property? Are you near a University? Near a big employer? In Zone 1 or Zone 4? Is there a market for student HMOs / young professional HMOs? Are you in Marylebone with a premium property that appeals to a corporate client more? What about schools nearby, if they are good you may attract a long term family rather than a young professional.
- Take a look around your area, ask agents the type of tenant they’ve housed in the postcode recently and go from there. This will also tie in with point 3 regarding where you advertised in the first place.
5. Reduce your voids
- The biggest loss to a landlord in regards to rent isn’t the marginal increases you can make monthly it is larger void periods. If they are regular, for example every year, you need to look at firstly why this is happening and secondly what you can do to stop the specific problem. For example, time and time again we see student landlords not advertising until the summer in London then are left with a three week – one month void before the next group move in.
6. Find your niche, or use someone elses!
- This links in with point 4 regarding your area and type of tenant, but there’s no harm in exaggerating this! For example, Hackney Wick is a classic area for students and creative professions. Can you change the decor of the property or offer out local incentives with local businesses for signing with you at your property? People are always willing to pay more for convenience and experiences, and if you make renting with you a great experience for a certain profession or type of tenant this is likely to win you bonus points in terms of mark up in rent.
- Note: you can do this with anything, eg Corporate clients in Canary Wharf – have a bottle of champagne for them on arrival or a free couple of cocktails in a local bar. This will make you stand out from the crowded market and likely get you referrals for any other properties or renewals.
7. Depending on your area and type of property adjust your rental strategy
- Although you may have been doing long term rentals for as long as you can remember your property may be suited to another kind of rental including shorter term holiday lets, multiple occupancy or corporate lettings. Specifically with shorter term holiday lettings you need to be careful. There is much legislation and regulation around this market, especially in London, though if done right it can boost your yields significantly.
- Mix it up – You don’t have to adhere to just one strategy. Why not mix it up, see what works for your property? Eg a longer let for students or post-graduates if you’re nearby a University and then short term holiday lets in the summer.
8. Look at the market and your immediate competition
- This is arguably one of the most important strategies when looking at the maximum rental amount you can achieve with your property. Look on all the main portals and websites at similar sized properties in a ¼ or ½ mile radius. What’s the maximum advertised? Is it a higher or lower quality than yours? Price yours accordingly, or look at the differences between yours and the higher priced and think about what you can do differently.
9. Review your agent if you use one, if you don’t use one currently consider it
- Agents are the industry experts when it comes to setting rents and achieving them. Or they should be. We always recommend looking at your agent every couple of years and the rent they are achieving for you. If it’s lower than the rest of the competition consistently you might want to consider switching. If you don’t use one at all, and are wondering what you can do to improve – consider talking to an industry expert, usually rental valuations are free.
10. Reduce admin costs and plan your tax
- In conjunction with consulting your (or a new) letting agent the other industry experts you should be consulting is a property tax planner, especially if you’re a multi-property landlord. Would you benefit from transferring your properties in to a company name? What costs would this incur? Would you benefit by selling certain properties? Purchasing more? We often hear stories from our landlords that this is the best money they ever spent, and the reward for taking property tax specialist’s advice are ten fold what was paid for it.
So there’s our top strategies for driving your rent and yields higher if you own a property not only in London but across the UK. Don’t forget, we are based in London, Loughborough, Lincoln, Hull, Cardiff and Nottingham – so if you’d like to drop in to any of our offices for a coffee and informal chat about how we can help with any of the above please feel free to get in touch on 07972 611317 or [email protected].
We wish you luck in your 2020 property journey!