Much has changed in the world around us following the COVID-19 pandemic, and the world of property is no different. For those looking to move home over the coming months, it’s important to be aware of the many changes to the property market that could be beneficial to you – and your wallet! Some of these are things you should know and potentially negotiate before you sign your tenancy agreement, so read on and get a leg up.
Caused by an emigration away from cities throughout the pandemic and supported by a slow return to normality across the country and particularly London, landlords have largely seen the demand for rental properties plummet. According to house-sharing website Spareroom, house prices in the capital have been most affected, seeing prices drop in the centre of London by as much as 34% at the height of the pandemic.
As a result, for customers looking to secure a tenancy agreement particularly in London, there is more room than ever to negotiate on a more favourable price that is more affordable and reflective of the market conditions. In general, for those looking to live in London, a rental reduction of 15-20% compared to pre-pandemic prices can be achieved. Compare historical prices around the area you’re interested in and check to see whether this price reduction has already been factored into the current asking price. If not, you should be in a good position to ask for a sizable reduction in rent as part of your offer. A word of caution, however. As normality continues to return, the more difficult it may be to get your desired price if the property is in high demand with various offers being submitted. If you put in an aggressive offer and get rejected, you may lose the property to someone making a better offer. You’ll end up back at square one with your search.
Rental Term Length
Traditionally, in high demand areas like London, tenancy agreements have tended to run for a minimum of 12 months with the possible inclusion of a six month break clause. Throughout the pandemic however, many landlords have had to adapt to customers’ demands around fixed tenancy lengths. A pattern that has emerged and continues to flourish is the increased flexibility around not only the existence of a break clause (be it anywhere from as early as three months) but also the length of a rental agreement. Several new contracts we have seen emerge include: open-ended contracts with a 6 months minimum length and fixed notice period, shorter notice periods for tenants and lengths of contracts being shortened to suit the tenant’s uncertainty on future plans. Long story short – there is greater flexibility around the traditional 12 month minimum, which is great news for many tenants and particularly students, who might be looking to rent for 9 months rather than a full year.
In theory, as lockdown across the country continues to slowly unwind, we can anticipate that there will be more clarity around decisions for tenants. Nonetheless, it would be wise to consider your personal best- and worst-case scenarios and negotiate your length of agreement and any necessary clauses based on these factors.
Section 21 Evictions
One of the key legislations that have taken place during the COVID-19 pandemic is the government’s amendments to Section 21 of the eviction of tenancies. In England, since 29th August 2020, landlords have been instructed to give the notice period of a minimum of six months to current tenants who have been occupying the property for a minimum period of four months. This also means that should you fall into financial hardship after you move in, you have more time to get back on your feet without the risk of being evicted from your home.
Should you be in the process of agreeing on a tenancy with a view of staying in the property for a prolonged period of time, it would be advisable to maintain this extension in your contract as some landlords may wish to still operate without the extension.
Renting a property can be tedious, but with the latest updates in place to provide better safeguarding for tenants, there has arguably never been a better time to negotiate when renting a property. We hope with the tips above, you will remain better informed and well-equipped to make the most of the current climate for renting. Should you wish to find a property to let, why not do so on our smart property search platform?