What are void periods and their impact on the UK Property Market?
The UK housing market has proved its resilience during the global pandemic and even after, it continues to show its strength. With huge interest from both local and international property buyers and tenants grabbing the best properties across the country, the sector continued to outperform its peer markets. Though the prices are inching up due to this trend but it also poses another benefit for buy-to-let UK property buyers. It is observed that void periods have fallen in England and research has confirmed it too.
Void Periods – are the time that a property sits empty before being acquired by the tenants. The average void time is now 20 days compared to 25 days – last year during the pandemic.
According to a report, landlords are losing around £599 (on average) every time there’s a gap between the tenant leaving and the next one moving in. This is down from £697 in early 2021. It is because the homes are being acquired more quickly each time, so the amount of rent lost is also falling. Moreover, the average rents have also risen compared to previous months.
Void periods across the UK property market
If London’s property market is compared to the rest of the UK property market, it seems to lag in terms for demand of properties and growth. However, according to the data obtained from the report, it has fared the best in void periods. The average cost for a landlord is roughly around £984, compared to £1,285 last year.
Other parts of the country have seen less significant falls but the difference is still there. For instance, in the south-east, an empty rental property cost the landlord £87 less than it did a year ago.
During the global pandemic, landlords and developers alike were looking at ways to mitigate the longer void periods and increase occupancy. With long-term tenant demand dwindling, and the prospect of a long time without income looming large, the rental expectations were slashed just to secure a tenant and reduce the long void periods between agreements.
However, every sector has learnt to perform according to the new normal and in the UK property market, tenant demand has also returned to the rental market on all fronts and this has started to cultivate signs of a rental market revival across the country.
Let tenants stay in the property
Previously, it was observed that in an attempt to maximise profits, landlords tend to cut corners, which resulted in evacuation. Now, it is in your best interests to keep the tenants in the property for as long as possible, in most of the cases. In order to make tenants want to stay in the property, the landlords can take the following steps:
Check areas with higher demand
Think about areas, where people want to move for jobs and schools. These are the areas with higher tenant demand and this is where you must invest to have a bigger chunk of tenants.
Size of the property
Depending upon your target market, property size can make a difference. For instance, if affluent young professionals are your target market, a spacious two-bedroom apartment might be a good choice. However, if you are buying a property in London, a studio or one bedroom apartment can be a popular choice.
Invest in contemporary properties
Nowadays, tenants demand modern homes with up-to-date appliances. Poor WiFi and a kitchen without a dishwasher are no more on any tenant’s wish list – no matter, how attractive rents are. Everyone wants to move into a new home and go to work the next day. On the contrary, you can make a property more attractive by adding new smart technology, which can make a tenant want to stay.
The more eco-friendly your property is, the lower your tenants’ bills will be. It can be another attractive feature and you can get more tenants for your property that can also reduce the void period. Remember, new-build homes offer the most energy-efficient options.
Make it a personalized space for them
Tenants want to feel at home in a place, even if they are renting. Even if you are offering a furnished pad, consider investing in a furniture pack to get the right balance. At the same time, keep it in view that it is their space by giving plenty of notice for inspections.
Resolve issues on a priority basis
If a home appliance breaks down or there is a leakage, respond as quickly as possible. Figure out to replace the appliance or get it repaired as soon as possible. The same applies to any disputes that arise. These steps will help you get and retain good tenants.
Sometimes, despite your best efforts, tenants may decide to vacate the property. It is important to have a contingency plan for this so that you can cover any costs until you find a new tenant.
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