With many disinclined to sell the family home for less than they believe it’s worth, and some struggling to sell at all, it’s not surprising that a new breed of ‘reluctant landlord’ has materialised due to the downturn. In many cases, vendors have little choice but to put their homes on the lettings market as well as up for sale, to cover the mortgage as they wait for a brighter future. Jane Ingrams, head of lettings at Savills, says the number of lettings properties owned by ‘reluctant landlords’ has doubled over the past year.
The problem is that hesitant new landlords, who never anticipated entering the rentals world, generally aren’t keen to spruce up tired looking homes to entice tenants swamped by a multitude of choice. Like parents coaxing unwilling children to do their homework, estate agents are urging landlords to replace that 50-year-old fire hazard horsehair sofa, or install a brand new kitchen.
‘The rentals market is flooded with unsold homes not fit to let,’ says Lucy Morton, head of lettings at London agent WA Ellis and president-elect of the Association of Residential Lettings Agents. Unenthusiastic landlords need to ‘provide modern bathrooms with power showers and newly decorated rooms with contemporary finishes’. There is also a potentially dangerous situation in which more sales agents are turning to lettings, but are not all aware of legal requirements, such as gas safety and energy-performance certificates and tenancy-deposit schemes.
Using an ARLA registered agent could save nasty brushes with the law and reduce the risk of being locked into long contracts at lower rents, suggests Mrs Morton. Andrea Borden adopted the ‘reluctant landlord’ sobriquet last year when trading down to a two-bedroom apartment in Ide Hill Park, near Sevenoaks, Kent. Her agent suggested she break the chain by purchasing a four-bedroom detached house that had lost its buyer.
‘The market turned, rents dropped and I couldn’t let the house,’ she says. After giving the house a fresh coat of paint and new curtains, she came up with a novel solution: offering the first month rent-free, attracting a family that now rents her house for £1,850 a month through Savills.
How to succeed as a relucant landlord
If you want to thrive as an accidental landlord, completely change your mindset and look at your home as an investment, advises Tim Hyatt, head of lettings at Knight Frank. ‘With a great deal of competition there is 200%–300% more rentals property in some parts of London alone you need to be realistic with price and be aware of market demands in style.’ Mr Hyatt says you must be ruthless.
‘Remove all your personal effects and rip out dated avocado bathrooms. Tenants today want fresh, clean living at a competitive rate.’ In addition, it’s crucial to move fast in the current market. ‘I recently contacted a landlord about an offer,’ says Mr Hyatt, ‘and by the time he made a decision and got back to me, it was too late.’
With rents down by 10%–30% and the number of rentals homes available at an all-time high, the temporary landlord must not fret. New European tenants are emerging in Britain, wanting somewhere to live. ‘Portray your family home as a show-home style apartment, rather than a damp, uninviting place with no central heating,’ adds Mr Hyatt.
Another answer can be to rent show-home style furniture, or ‘dress’ your property when showing prospective tenants round, giving your home the edge over the opposition. Theresa Wallace from Savills in Sevenoaks, Kent, says large unfurnished houses can look particularly bleak: ‘I suggested a client dress her large living room and hall with a few pieces of good furniture and hang soft, white towels in the bathrooms to add warmth. It made a huge difference and the property rented immediately.’
Top tips for tenants
Property finder Jonathan Bramwell, from Prime Purchase Property Acquisition in the Cotswolds, says:
* Be flexible a landlord trying to sell might reduce the rent if you allow viewings
* If you demonstrate you can get a better deal elsewhere, you can bargain on price
* If you become too greedy, the landlord might not fix that leaky tap as quickly as you would like