James Dodds, Lettings Director at Grosvenor
As we enter a period of ‘relative’ calm after an angry political and economic storm, the impact on the Surrey lettings market has become clear. For landlords, the growing cost of mortgage borrowing has pushed up rental values. For tenants, finding a property in Surrey has become increasingly competitive. Here James Dodds, Lettings Director at Grosvenor, explains what lies ahead for the lettings market in 2023 – and why, for tenants, now’s the time to get personal.
When things are continually changing, it’s often quite reassuring to have something – regardless of what that something might be – that remains constant.
Against the backdrop of a continually moving property market, and one that was made all the more dynamic as a result of changing Prime Ministers (twice), interesting economic decisions and increasing mortgage rates, the one constant appears to be the lettings market, which, although it is moving, it’s moving slowly and steadily.
From our perspective, there is still a shortage of good quality homes to let. There are still too many tenants in relation to the number of available properties. And rents are still on the up. So, what exactly has changed?
The last 12 months have seen rental values increase month on month. What’s different at the moment is that rental values are staying high with no signs of coming down. Even now, existing tenants and those coming to us to view on-market properties are taken aback by how much rents have increased.
For new tenants looking for properties, there’s no denying that it’s tough. And frustrating, too. As quickly as properties are coming to market, they’re being snapped up.
Only last week, we launched a lovely new house from our Hinchley Wood office. Within the first few days we had three offers. Then we received a fourth, which came in well above asking price.
Let’s get personal
At times like this, when there are high levels of competition, we advise those looking to rent a property to steer clear of property portals and liaise directly with an agent instead.
There are three main reasons for this. Firstly, there is often a time lag between rental properties becoming available. So, by the time you’ve seen it on Rightmove, for example, it may have already been seen – and offered on – by several people. This links nicely onto the second point, which is that if an agent knows a prospective tenant and what they’re looking for, then it’s much easier to match that person with a suitable property when it comes up. Finally, we carry out a significant amount of discreet marketing on properties with rental values of £10,000 pcm and upwards. So, just because properties of a certain level aren’t on Rightmove, it doesn’t mean that they’re not available.
Estate agency – be it lettings or sales – is a people-based business, so developing personal relationships with agents is a good way to keep yourself front of mind. If they know you and understand your position, then you’re over halfway there.
This same certainly can’t be said of portals. How many times have you enquired on a property and never heard back from an agent?
A good year
Lettings, like every other aspect of the property market, is based on supply and demand. And, if you’re a landlord with a property that’s in demand, it stands to reason that you’re going to see a return on your investment.
Next year is likely to see demand continue to outstrip supply, which means that landlords are likely to remain in a strong position – not only in terms of rental income, but also length of tenancy. Many tenants who, after putting in the highest offer, are now negotiating long-term contracts. A minimum of two years is no longer uncommon. We’re even seeing tenants negotiate three-year contracts at the moment.
If you’re a landlord looking ahead to 2023, then December is a good time to begin preparing a property for launch in January 2023. If you’re a tenant thinking of moving in the New Year, then the best thing to do is register with Grosvenor now. There tends to be more movement in January, so you if you use December to prepare, you’ll be ready to go in the New Year. We’re also seeing more and more people move abroad, and are expecting to see many more do so in 2023, so there’s likely to be a wider choice of properties available only several weeks away.
Whether you’re a landlord looking to let your property or a tenant looking to find one, we can help. Get in touch with our lettings team by contacting us at any of the three offices below.