Alex Vinter Blog
Tuesday 9th August 2011
Alex Vinter: Blog
It’s snakes and ladders in the rental world.
Not too long ago renting was for the short term. A few years sharing a house as a student preceded a few more years renting as careers kicked off, and then, before too long, it was time to take the plunge and buy your first flat. It was small, expensive and definitely basic: but it was yours.
How things have changed.
Nowadays, many would-be first time buyers are renting well into their 30s, often with no prospect of even a glimpse of the housing ladder. With high deposits needed, alongside high property prices across many parts of the UK, affordability for first-time buyers shows no signs of improving.
To add insult to injury, the first rung of the rental ladder is now getting tougher to surmount. Soaring rental prices – especially in London and the South-East – are great news for landlords, but it’s making life tough for tenants or those wishing to move between rental properties.
The Financial Times has recently reported that a growing number of tenants are being asked to pay rent upfront. This is certainly something we have seen on the increase at Edmund Cude. In some parts of London, landlords are being able to literally name their price and also ask for upfront payments. We are almost in uncharted territory.
There are also some suggestions from other London letting agents that more and more tenants are failing credit reference and tenant checks because they don’t earn enough to meet higher rental costs using the existing income multiples often used by agents. Some are turning to guarantors – parents, be warned – while others will stump up the cash.
We have had a landlords’ market before and it won’t stay like this forever, but for now, tenants are struggling to get on that rental ladder.
A real danger at moments such as this is the threat unethical and rogue landlords and letting agents pose to tenants. It goes without saying that tenants should only use letting agents that are members of ARLA, but there will still be snakes with a market like this. Stay alert.
* Alex Vinter is commercial director of London lettings firm Edmund Cude
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