Short-lets should be a target for landlords, in order to reach a younger market more interested in flexibility than stability.
Following its recent report on the prime lettings market, Savills has urged landlords to be flexible in their offerings as rent reductions are becoming rife in areas with high supply. Prime markets outside London have fallen 1.5 per cent in the last year. The properties that have been let quickest and at the top prices have been those in good condition in a convenient location. This means that new build units and those near schools have performed particularly well.
There has been a change in expectation in the rental market, as short-lets grow in popularity. A younger demographic of tenants are seeking flexibility.
The agency explained: ‘Landlords will need to bear the current climate and supply in mind, remaining flexible on price and focused on the condition of their properties to remain competitive with the new build stock. The rising popularity of short-term lets means tenant’s expectations have changed – to appeal to a younger demographic landlords should also consider what they include in a rental package and remain flexible on terms.’
The prime market in London also saw slight decline in the final quarter of 2017. Rents fell by 3.1 per cent across last year as a whole. However, whilst decline was evident, it was at a slower rate than in previous years, offering some reassurance to buy to let investors. Tenants have been shown to be increasingly concerned with costs amidst current economic uncertainty, which has lead to a slightly stagnant prime market. However, investors should not be deterred as no dramatic change has been noted.
Savills continued: ‘A high level of supply has continued to hold back rents, with tenants remaining cost conscious in the current economic climate.’