The chronic lack of properties to let has continued into Quarter 1 of 2022 (January, February and March), with demand outstripping supply so much that the majority of properties let within a week if not before they were even listed. Across the county our letting teams were swamped with enquiries as soon as properties were listed, and solid rents were regularly achieved on new listings, relists and renewals. This tangible disparity between supply and demand has impacted applicants’ behaviour in different ways, as our eight offices report:
Inundated with emails…
Where a property had been priced correctly and well-presented, our letting teams were having to withdraw the listing from the portals – sometimes in a matter of hours. Their focus was to then sift through the many enquiries to discern which applicants would be the best match, before booking viewings. For example, a 3 bedroom house in Bicester at £1,3501 received more than 50 enquiries within the first 48 hours of being listed with many frustrated that they could not simply take it unseen (main photo). Qualifying leads is so important, so that viewings are only booked for the most suitable applicants rather than everyone who wants to view. Case in point: a property advertised with our East Oxford office as best suiting a single occupant (due to size) received enquiries from couples with children “just in case”!
…and an increase in ‘real’ contact
In many cases applicants are acutely aware of the level of competition they face, and we have seen an increase in the number of applicants phoning – rather than emailing – in a bid to ‘sell’ themselves rather than risk sitting in an inbox with hundreds of others. In Oxford, applicants have been taking short lets so that they are ready to move as soon as the right property becomes available.
A small resurgence for video
Video viewings had mostly been pushed aside in favour of physical viewings, but in this quarter there was a small revival, as those who don’t live locally enough to quickly view were becoming frustrated at missing out on so many. For example, a couple relocating to the area who had missed out on a number of properties had seen a 3 bedroom house in Abingdon at £1,300 on our website. They watched the video tour, drove to look around the area, then immediately applied for it.
Compromising to secure a property
In the past, people would have a list of requirements – long or short – that they really weren’t prepared to compromise on. Whilst these lists still exist, the ‘deal breakers’ are far fewer and people are more prepared to make a quick decision. Being able to work from home remains a priority, but they will now settle for a ‘space’ rather than a dedicated room.
Quality retains tenants
Quality is still key and the properties which are now starting to struggle to let are the ones that aren’t in top-notch condition. Ensuring your property is well presented will ensure you secure the best rent and the best tenants, who will want to stay. In fact, in March alone we had several lets in Oxford where current Finders Keepers tenants wanted to continue renting with us, but needed a change of property or location. One example was a couple living in a 1 bedroom apartment just outside of Oxford. They needed somewhere bigger but were keen to rent through us. Our letting team found them a beautiful 3 bedroom barn conversion in Headington (photo above) and they applied straight away.
Cautiously renewing tenancies
Tenants continue to renew their tenancies at a steady pace. Many are requesting break clauses, which is discussed on a case-by-case basis with landlords. Whilst this has often been the case if a tenant is considering buying, this is the first quarter that the rising cost of living has been cited as a reason for requesting the clause.
Rents on renewals
Many landlords carefully – and correctly – did not increase rents over the last two years, opting to retain tenants. Many tenants are now accepting rent increases on renewals after a one-to-two year plateau. Where there is resistance to an uplift in rent, a quick search online of available similar properties usually leads to tenants accepting the new rent, realising that in many cases the proposed amount is still below the current market rent.
Not just negotiating on rent
According to recent ONS data, rents have increased at their greatest annual rate for more than five years2, as demand continues to heavily outweigh supply. There are a handful of cases where applicants are offering over the advertised rent level to try to secure the property, but for the most part they are using other factors to bargain. For example, if they are here for a three-year placement they are offering to commit to a three year tenancy if it puts them at the front of the ‘queue’. Historically, a single occupant would be preferred as it generally means less wear and tear on a property, however landlords tend to be opting for couples now (especially where this comes with a dual income) – perhaps a hangover from the uncertainty of the last couple of years?
Students opting for individual lets
After two years of the uncertainty of remote studying and households having to isolate on and off, it’s not been a surprise that in the student market there have been fewer large groups (six or seven sharers) looking to rent together. Instead, the demand for renting by the room has increased. These lets often come with shared facilities and – crucially – the rent includes utility bills. This gives flexibility without the joint and several commitment, and our Shared Letting division has been quick to adapt to this change.
Green shoots in the form of investors
The end of the stamp duty holiday has, understandably, seen the trend of landlords selling their investment properties slow compared to last year. In fact, Q1 has seen the steady return of investors to the market, both in terms of those totally new to letting and those adding to an existing portfolio. In each case, it has been an immediate success, securing great tenants very quickly. Some examples include:
Witney – a brand new, small development; three 1 bedroom apartments have been bought by investors, listed at £1,100 and all have let (photo above)
Banbury – a 5 bedroom house in a rural setting, £5,500 which let off-market (photo below)
For more information and an up to date view on the Oxfordshire letting market please email email@example.com.
1 All individual rents in this report are pcm and marketing rents