Jump to content
House Price Crash Forum
Sign in to follow this  
Upabove

London Rent Rise

Recommended Posts

Hi All

Been lurking here for a while, but thought I'd contribute my recent and ongoing rental experience in London.

Moved to a new room via spareroom behind Clapham Junction in October having moved back to London after 6 months away. While searching for a new room, I noticed that rents were noticeably about £40 (about 6% at my price) cheaper than the same time last year and whereas last time I looked for a room I got around 20 responses to my room wanted advert, this time I got over 200 in under a week!

I thought the new room was ok priced at £590, not the nicest of flats but in a great location. However, typically, the contract is up for renewal in October and the LL wants to put the rents up by 4.6%. The other flatmates are unhappy but willing to pay, I on the other hand would probably move rather than pay. But I responded to his request with the below email and I'll update the thread once I hear his response.

The flat is ex council 3 bed but with the lounge converted to 4th bedroom.

Many thanks for getting in touch with plenty of notice, it does help to settle these discussions with plenty of time prior to contract renewal. Apologies for our delayed response, but it has just taken a while till we were all back in the flat at the same time to discuss.

We completely appreciate the requirement to maintain a competitive market rent, however I am afraid we do disagree with your proposed valuation. The proposed new rent is a 4.3% increase well in excess of the current RPI rate of 1.6% [1]. In addition, the current rent (based on Zoopla’s valuation of the property [2]) already represents a 6.08% yield, well above the current Battersea average of 4.2% for HMOs [3].

We understand some properties in the vicinity have gone for higher amounts, however this is determined by both quality and location. We believe that an identical flat in the same estate would be a fairer comparable; no. 4 Jansen walk was let for £2,145 in April [4], albeit it hasn’t had its lounge converted to an extra room but it is basically the same property, and since this date average rents for larger properties have noticeably declined [5].

Based on all of the above we believe the current rent to represent fair value especially when combined with the recent market knowledge of our 2 most recent move ins. We are all very happy with the flat and yourself as a Landlord however I am afraid we wouldn’t be able to sign the contract at the new rate. We are always happy to discuss further, or alternatively we could delay the conversation for a further month so we can both see more clearly what direction the rental market is heading as hopefully you can appreciate it would a nightmare situation for ourselves if one of us required to move but was prevented in re-letting the room due to going rate having dropped below your proposed rent.

Yours Sincerely

References:

[1]: https://www.ons.gov.uk/economy/inflationandpriceindices

[2]: http://www.zoopla.co.uk/property/37-jansen-walk/london/sw11-2az/23240311

[3]: http://www.londonpropertywatch.co.uk/average_rental_yield.html

[4]: http://www.zoopla.co.uk/property-history/4-jansen-walk/london/sw11-2az/34799536

[5]: http://www.londonpropertywatch.co.uk/s/ph?pc=LON&t=3b&c=r

Share this post


Link to post
Share on other sites

Good on you. Will be fascinating to see his response. I bet he was banking on you all just rolling over and taking it, rather than getting a well-researched and reasoned rebuttal!

Share this post


Link to post
Share on other sites

I've noticed rents are dropping rapidly.

Looking a bit to move , the agents are DESPERATE several voicemails everyday. easily 10-20% discounts on everything (price category 2200-2750 PCM)

Share this post


Link to post
Share on other sites

UPDATE:
Landlord came back with a total rent of £2,364pcm. versus the original raise to £2,387, yipee...

Going back to him to see if he'd accept just a 6 month contract, if not me and another flatmate are walking. Annoyingly I don't want to pay another set of letting fees (as this rent rise is just slightly cheaper than them, another reason the Scottish law banning them should be brought in!) but I'm not willing to get trapped in a flat in a falling market and 6 months should allow us to see the direction the market is going.

Also another anecdote. My mum owns a 2 bed flat next to Kew gardens, had a long term tenant for 10 years, recently became vacant, letting agent talked her into 10k worth of renovation (required, but overcharged) and also to up the rent (innit) from 1300 to 1500 (against my advice) well the flat has now been vacant for 2 months and has only now been able to let for next month (3 month vacant total) for 1400. No idea why the agents wanted to ramp so bad, surely the 3 months loss of fees+ additional work hurt them more than the small % they get of the increased rent?

Share this post


Link to post
Share on other sites

Check your agreement, but I think that if you don't renew it becomes a rolling tenancy: this would rely on the rent staying the same of course.

If you are having to pay agents fees for a new contract then why would you not find another place for lower rent if the market has fallen? (rhetorical economic question - I get that practically, moving is a pain.)

Share this post


Link to post
Share on other sites

Once it becomes a periodic contract it becomes much easier for Landlord to evict or increase rent at will, so always better to agree to another fixed term contract.

No fees required to renew the contract. I was saying that it's annoying the Landlord can increase the rent, but it'll still be cheaper for me to stay to avoid paying agency fees for a new place.

But anyway landlord has refused a 6 month contract, saying the price is "below market rent" and won't struggle to find new tenants, i disagree, so I'm off. Can already see nicer flats in Wandsworth for £70 cheaper so quids in.

Share this post


Link to post
Share on other sites

For what it is worth, we have been following the London market, admittedly east side, and it seems to have become a graveyard of unlet and unsold property this summer. I think everything is negotiable right now.

Share this post


Link to post
Share on other sites

Once it becomes a periodic contract it becomes much easier for Landlord to evict or increase rent at will, so always better to agree to another fixed term contract.

No fees required to renew the contract. I was saying that it's annoying the Landlord can increase the rent, but it'll still be cheaper for me to stay to avoid paying agency fees for a new place.

But anyway landlord has refused a 6 month contract, saying the price is "below market rent" and won't struggle to find new tenants, i disagree, so I'm off. Can already see nicer flats in Wandsworth for £70 cheaper so quids in.

Good for you! Keep an eye on it for vacant period and keep reporting back

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   62 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.