Recent figures from the Office of National Statistics showed that the growth in UK private rental prices has only increased by 1% in the last 12 months to January 2019, which is good news for tenants. However, 2019 will see many changes in the letting industry that could cause rental prices to increase.
As a landlord, the rent that your tenants pay is a source of income. Whilst you need to cover your expenses and make a profit, it’s important to bear in mind that frequently increasing your rental prices will make keeping your tenants for the long-term more difficult, finding new tenants harder and leave your property empty for longer.
Happy tenants will make your life easier as a landlord. Below, we’re sharing our tips on how to avoid passing costs on to your tenants to keep them, and you satisfied.
1) Consider alternative deposit options
In December last year, the Government announced new measures that will reduce the amount private renters have to pay up front to secure a home from 6 weeks’ rent to 5 for annual rentals of under £50,000. This is a good time to consider alternative arrangements, such as deposit insurance schemes that allow the tenant to pay in regular instalments instead of all at once.
2) Tenant Fees Ban
As of 1st June 2019, the Tenant Fees Ban comes in to place, which means landlords and letting agents are not allowed to charge a range of tenant fees. Any fees or charges (including for third-party services like reference checks) in addition to rent and tenant default fees, such as a breach of the tenancy agreement, will be banned. The ban applies to all shorthold tenancies and licenses, excluding long leaseholds, social housing, holiday and company lets and non-Housing Act tenancies.
As mentioned above, the Tenant Fees Ban will also change the cap on the maximum deposit that you can ask from tenants.
3) Self-manage your tenants
By becoming a self-managing landlord, rather than using a letting agency, you will save money on your expenses and keep the fees that your tenants pay low. For example, at the start of a tenancy, not only will meeting your potential tenants yourself help you find a reliable tenant and lead to a better relationship with them in the long run, you also won’t have to waste your money paying an agent to do it.
4) Avoid long void periods
If your property is empty for a long time, don’t be tempted to increase your rental cost as that will put potential tenants off. Instead, focus on how you could avoid long void periods. The most important thing you can do is take good care of your landlord/tenant relationship to make your tenants want to stay long-term. For example, fix any issues with the property as soon as you can and communicate with your tenants regularly to maintain positive rapport.
You may even want to consider offering a reduction in rent or at least negotiate about the cost. Showing your tenants that you are willing to help them financially will hold you in good stead with them if they are looking elsewhere to reduce their overheads. In a worst-case scenario, such as your tenants going bankrupt, you could end up with empty premises and no income at all.
One extra piece of advice
Sometimes, insurance costs are simply passed on to tenants. We can offer many cost-saving insurance solutions and ensure you have the correct covers in place should the worst happen and you need to make a claim.
What’s keeping you awake at night? Talk to our small business team today and let us provide a solution to your concerns. Get in touch today on 0800 115566 or at sme@thomas-carroll.co.uk.
