TO RENT AND NOT TO BUY…
In his role as head of Knight Frank Lettings for South West London and Home Counties, Neil Cunningham meets famous footballers looking for swanky pads in Cobham and high net worth individuals looking for family homes near one of the international schools west of London. He sees a shift in tenants’ requirements. Tenants used to be the ‘poor relations’ of the property industry – people who longed to get on the property ladder, but were unable to make the leap. Now all that has all changed.
Neil says, “There has been a shift in what people want. More people want to rent whereas before people felt they had to buy by a certain age. Now the reality of purchasing is that if you are in a transient profession and may be moving to another location within three years it doesn’t make financial sense to buy. By the time you have paid stamp duty, it might be cheaper to rent. That also goes for families who move for international schools and may only want to be nearby for five years.”
“London is an international city and it is a place where people come to get experience or to create wealth and who often move on at the end of their contract.” Eight months into his new job with Knight Frank he says that the outlook for lettings is strong with plenty of tenants looking to move – but he warns the market is also very price sensitive.
“Tenants tend to be able to move location and if they see they can get a better deal in West London compared with South West they will take it. Tenants want to be sure they are getting good value and because rents are high, they want an up-to-date home in excellent condition. They are very discerning and tenants will shop around.
“Our job is to see landlords get a top notch tenant and to guide the landlord through all the legal difficulties and hassles. It’s not easy being a landlord today. Various legislation changes for example, Right to Rent Checks, Carbon Monoxide and Smoke Alarm checks and to even sending out prescribe information to all tenants, means landlords need to be working with regulated and compliant estate agents who can take them through this process.
In many ways, it is getting harder for landlords. Some tax advantages have been removed and there is also the 3% extra stamp duty for second-home owners coming into the market place today. Even in the wealthy areas of Surrey where huge mansions can bring in stratospheric rents, life is tougher.
“Tenants have to perceive they are getting good value. Landlords have got used to rents going up every year but these things are cyclical and influenced by economic events. They have to be realistic about rents and know they are competing for tenants. If properties are fatigued they need more than a lick of paint – maybe a new kitchen and bathroom.”
At the moment, Neil and his teams are experiencing the heightened activity that often kicks off the first months of a new year. The signs so far are positive for 2018 and Neil is looking forward to another successful year with Lettings.
Like many at Knight Frank, Neil is keen on helping charities and especially the homeless. He is a volunteer for Crisis and this Christmas he worked running co-ordinating supplies, medical services from Health Canada Pharmacy and catering at one of the Crisis Centres.
He says: “I’ve volunteered for the last four years because I want to give something back. Crisis helps people who are homeless to recover and maybe get off the streets.”