What to offer??

mrsnow101

Myself and the girlfriend are looking at renting an appartment within the next few weeks - it will be our first place together. The advertised 'going rate' for the places we are looking at is around £575 pcm.

There is an abundance of these flats available at the moment - as with a lot of the new build developments. I'm just kind of wondering generally is there any flexibility with rental negotiation?? How low realistically could we try and go?? Any one have any advice/experince of similar situations?

Thanks in advance.

beingjdc

You can try - often up to about 10% is achievable, maybe even more in an area that's genuinely oversupplied. Do you know anyone else renting in the area and what they're paying?

Here (London Zone 2) the rental market goes through periods of being quite tight, so for people moving from one rental to another you're often bounced into paying top whack, but if you're prepared to take a chance of losing a place you like to secure one at the right price, go for it.

I'd offer somewhere between 500 and 525 and see what happens.

BettiePage

beingjdc wrote: »

.

I'd offer somewhere between 500 and 525 and see what happens.

I'd start a bit lower with the aim of agreeing around these prices.

Nothing ventured nothing gained afterall.

poppy10_2

Should definitely offer no more than 525 - start at 495 and let them bargain you up a little.

mrsnow101

Thanks for your replies. We'll give it a go.

MarchieCTID

My girlfriend and I are in a very similar position to mrsnow101; we are also looking to rent for a similar amount of money in the not so distant future, in Manchester. The scene that the OP sets (an abundance of new build apartments at around £575 pcm) sounds very much like the situation in Manchester at the moment. I'd like to put my thoughts down in writing and see if you good people can tell me if I'm right.

There have been a ridiculous number of developments in the past few years in Manchester city centre, and they're still building more. There are plenty of apartments which are sat empty, indeed some have never had anyone live in them since they were built. One example of the extent of the over-supply in Manchester at the moment is the St. George's Island development; those behind this project are currently advertising on local radio that they will guarantee three years rental for people who buy an apartment in their complex. I've also heard anecdotal evidence that people have had offers of 30% below the asking price accepted for the same development.

That applies, of course, to those looking to buy an apartment. What about people like the OP and I, who are looking to rent? Supply clearly exceeds demand for rentals, just as it does for sales; there are many buy-to-let investors who have bought apartments in Manchester and have sat with them empty for years; there are new developments being built all the time and for those who have bought apartments to rent them on, the value of the apartments in some developments has plummeted.

The bottom line for a buy-to-let landlord is that they have to pay their mortgage each month on the apartment, regardless of if it's empty or not. With the situation in Manchester like it is, there are plenty of apartments available for rent, some of which will have been empty for an extended period of time. Say the mortgage on an apartment advertised for rent at £575 pcm is £500 pcm (I don't know what the margins are that buy-to-let landlords work on, but I guess that they are quite low, instead relying on capital appreciation rather than rental yield). For every month the apartment is empty, the landlord makes a loss of £500. If you make a really cheeky offer to rent at say £400 pcm for a year, the question facing the landlord is this: 'will this apartment rent for the full asking price in the next four months?' If the answer to that question is yes, then they reject your offer and wait for a better one. If the answer is no, then they are better off accepting your offer and making a £1200 loss on the apartment over the year, rather than perhaps waiting for a longer period while paying off the mortgage from their own pocket and hoping that someone comes in with a better offer.

Like I say, I've never been in the market for a place to live before, so I might be barking up the wrong tree on this. I'd love to know what people think.

Turnbull2000

The balance of rent negotiation is heavily in your favour, and there's a good chance that the landlord is taking a monthly loss on this property. If going through an agency, request proof that the property has been purchased with a BLT mortgage and not residential. A residential mortgage would mean your contract is null and void, potentially leaving you with no notice period if he/she runs into trouble.
And yeah, start at under £500 :beer:

sniperpenguin

start at under 500.

If you can do it, offer several months in advance (it may be your savings, but paying your monthly "rent" into your savings account will top it back up in no time) as this will make you appear serious about moving in AND waving a wad of cash unedr the nose of the landlord

mrsnow101

Just thought I would post a little update to this thread, as I know there are plenty of people in a similar situation to myself.

We found a flat we liked 4 weeks ago - it was listed at £575. When viewing it, the letting agent fed us with the usual gumph ("... these luxury appartments dont tend to stay available on the market for long... " blah blah blah).

Anyways - we waited 2 weeks, and the flat was still listed on rightmove. My partner and I decided to phone the letting agent with an initial offer of £500.

The landlord agreed to drop the price to £525 pcm - but no lower, which we agreed to. We are now moving in next week.

So the moral of the story? There IS scope for rental negotiation...

Cheers for all the advice.