Page last updated at 11:59 GMT, Wednesday, 25 March 2009

Tenants 'haggling' as rents fall

Keys
Rents tend to be affected by the situation on a local level

The cost of renting a home has continued to fall as UK householders let out their homes in a bid to beat the recession.

Two surveys suggest that there has been a surge in properties available to rent, pushing down costs for tenants.

Tenants, aware of the falling prices, have started to haggle.

Supply levels vary across the various regions of the UK, research from property websites Globrix and Findaproperty.com found.

But some debate surrounds which type of properties witnessed the biggest rent demand falls.

Both surveys draw on listings placed by estate agents on the websites.

Supply glut

According to Globrix, the number of new rental properties coming onto the market rose from 98,841 in the final three months of 2008 to 155,499 in the first quarter of 2009 - a 57% increase.

AREAS WITH BIGGEST RISE IN RENTAL PROPERTY
Carlisle
Shrewsbury
Swindon
Norwich
Exeter
Source: Globrix

The surge in supply means that average monthly rents have dropped to £795 at the start of March, down from a peak of £950 in May 2008.

The research suggested that Carlisle had seen the biggest rise in new rental homes at the start of the year, with the East of England also featuring prominently as Norwich and Ipswich are in the top 10 risers.

"What we are witnessing could be seen as a last-ditch attempt by thousands of worried homeowners to try and survive the worst economic climate in living memory and still have a property to show for it once we come out the other side," said Daniel Lee, of Globrix.

"Many homeowners, worried about losing their jobs and struggling with debts accrued during the good years, are renting their properties and downsizing or moving to less expensive areas to hedge their bets."

End of a trend

The poll by Findaproperty.com said that in March the average property had been listed for 65 days before being filled by tenants, down five days on the previous month, but up 17 days compared with a year ago.

Tenants, aware that they are spoilt for choice, have become very assertive over rents and are actively haggling
Zaza Patterson, Dreweatt Neate estate agents

It suggests that the pace of rising supply is slowing, possibly pointing to the bottom of the cycle.

"The second quarter of 2009 will be a key period for determining whether this is the beginning of a genuine recovery in the rental market," said a spokesman for the website.

The group said that while the number of flats available to rent was still rising the number of houses was starting to drop.

But Zaza Patterson, lettings manager at Dreweatt Neate estate agents, said that some of the biggest reductions in rent have been four-bedroom homes.

Tenants, she added, were finding their voice in an attempt to save money with rent.

"It is not just a surplus of properties to let that is driving down rents. Savvier tenants are also playing a role," she said.

"In some areas, where stock is particularly high, tenants, aware that they are spoilt for choice, have become very assertive over rents and are actively haggling."



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