A lettings agent, led by the landlord, tried to engineer a bidding war as we searched for a home. Is this now the norm?
I used to think buying a property was a complicated and expensive business, while renting was relatively straightforward: you found somewhere you liked, had a credit check, stumped up the deposit and moved in. But things have changed, and it seems landlords hold all the cards.
My girlfriend and I are both self-employed and rent a two-bed flat towards the outskirts of south-west London. This leafy enclave is lovely, but leaves us with a commute of 1hr 15mins each way to the places we normally work. We decided on a move to north London in order to be closer to our regular paymasters.
Enthusiasm was soon dampened by a mix of weekly rents that started at �350, in Highbury and Islington, for a trail of often disappointing, poorly maintained properties. But around Muswell Hill wasn't quite so pricey and the properties were more spacious. Game on.
We accepted that our rental payments would go up by moving to this part of the city, but we would save some money through reduced travel costs. The �335-a-week rent (�1,451pcm) on the property we liked was just within our budget. The flat was really nice. We said to the agent we'd take it. "Not quite as simple as that," he said.
It turned out another couple were interested in renting it and, although they were offering a bit under the asking price, they were prepared to pay six months rent up front. "The landlord has cash flow problems, I think," the agent said. I didn't like the sound of it. "Really," I said. "Are you sure?" The agent made a call.
Not quite true, as it happens. The couple were prepared to pay up front, if necessary, but what gave them the edge was that they could move in in two weeks; our timescale was five. The agent suggested we have a think and see if we could pay more in order to beat the other offer. We found a little more; well, we didn't really find it, we just thought we'd make savings elsewhere and offered �345 a week.
It didn't work. The agent said the extra money our revised offer was worth to the landlord didn't beat what he/she would get from the other couple moving in earlier. Even if we pushed ourselves to move in sooner, we would end up still paying rent on the property we were leaving.
As we returned to the leafy enclave, I was angry, and my head hurt from doing the maths. But I did start putting together all the investments and savings we could muster into a mortgage pot. Could it get us anywhere close to buying a flat in north London? As it turned out, yes.
The average deposit may now be a jaw dropping �66,000 but we've managed with about �25,000 less, and have agreed an 85% loan-to-value mortgage. And we're self-employed, remember, so not viewed fondly by lenders. Despite that, even with insurance and service charges we're about �250 a month up on what we would have been paying for the rented property.
It's not a situation I envisaged four months ago, but it's turned into a surprising and satisfactory one. It's also an unfortunate reflection of a (London) rental market where landlords and agents are eager to find and push the limits of tenants who may feel they simply cannot afford to buy a home. If we had been forced into accepting that, high rents would probably have left us unable to add to our savings ? and buy a home.
I get the impression it is now a landlord's market for rental properties, with agents able to get would-be tenants into bidding wars for the best properties. Is that right? Or are cases like ours still few and far between?
Source: http://www.guardian.co.uk/money/blog/2011/sep/21/landlords-hold-cards-rental-market
Banks and building societies Green politics Facebook Snowboarding European football US economic growth and recession
No comments:
Post a Comment