Q. The tenants I currently have in occupation have been fairly reliable and stress free throughout the last year of their tenancy, that given I’m currently discussing a possible renewal for a further 12 months with my managing agent but I’m hugely disappointed to be told that they are asking for a significant rent reduction, my agent is advising me to run with it as this is happening across the board on most of their renewals, is this true?
A. Absolutely! I’m afraid to report that with the slow down in the sales market more Vendors have decided to rent rather than sell their properties, this in turn has resulted in the rental market being flooded with plenty of good stock giving the tenants complete control of the market. This of course has pushed down the prices of rental stock in general resulting in Landlords having to be both competitive and realistic with their rents. Another contributor to the softening of the rental market is the recent impact the interest rate reductions have had – many tenants negotiating renewals have commented that given the drop in the landlord’s mortgage he should be willing to negotiate a little on the rent thus passing the benefit on to the tenant in this difficult climate. Of course many Landlords have not benefited from the cuts in interest rates simply because they are currently on fixed rates but tenants unfortunately are reluctant to consider this. In short my advice would be to consider negotiating very seriously given the current conditions; a void period in these uncertain times is best avoided at all costs.