Strong demand means less negotiating power for tenants

Strong demand means less negotiating power for tenants

Rising demand and greater competition between tenants for rental properties means that fewer people are able to secure good deals than in the past, with a greatly increased ratio of asking price now being paid. 

According to the latest rental market report released for February by Countrywide, it was reported that the average tenant in the UK now pays 99.9 per cent of the landlord's asking price, which is the highest reading seen since before the recession in 2007. 

In previous years, tenants have been able to capitalise on the fact landlords want to avoid void periods by negotiating with them for a lower price than they have asked for. However, the fact that there are now so many prospective tenants around means this is now far less likely than in the past. 

The highest ratio is paid in London, according to Countrywide. It said the average capital tenant will have to pay 100.9 per cent of the asking price, with many even having to get involved in bidding wars and pay over the asking price in order to beat the competition and secure a tenancy. 

The report also said that in the aftermath of the recession in 2008, tenants were able to negotiate a lower deal in as many as 23.5 per cent of all cases. However, this has fallen markedly in recent years, and as of February this year it has dropped to just eight per cent. 

Even in the areas where the ratio is low, it's still the case that tenants are having to pay almost all of the asking price. For example, in Wales, the lowest in the UK, the average resident will still be paying 98.7 per cent of what the landlord has asked. 

"The combined effect of growing numbers of people renting and a lack of supply has seen tenants’ ability to negotiate diminish. Tenants are having to compete more often and with more people in order to rent the home they want, meaning they need to offer more money in order to push ahead of the crowd," said Johnny Morris, research director at Countrywide.