That’s according to Upad’s James Davis, who says he didn’t believe “that landlords should be greedy” adding that “they should look at the bigger picture”.
And his words suggest that part of that wider picture is the economic situation.
He told people that jobs aren’t as secure as they have been in the past, and increasing numbers of firms are facing administration. In this climate, he says, it’s possible renters could default.
Mr Davis – who is Upad’s CEO – warned that “the landlords that think they can earn an extra £100 per month by attracting new tenants should think of the pitfalls.”
He suggested that fresh renters could prove less reliable than present ones.
Mr Davis said that when a landlord is renting to a tenant with three years of residency, who is consistently punctual with the rent, it’s possible their replacement’s higher rate might have its financial benefit “wiped out” in certain circumstances.
He explained: “If they miss one payment or have one month of void, then that gain in rental increase could be wiped out overnight.”
Mr Davis comments came in the wake of LSL Property Services reporting a 0.4 per cent hike in average Welsh and English rents between April and May this year.
Shortly after Mr Davis gave the example of his long-term renter with three years of residency with the same landlord under their belt, Hometrack’s Gary
Styles was explaining that he thinks it’s possible that lengthier tenancies could increase in number.
The strategy, risk and economics director explained: “I think that we may well see a bit more of a trend towards that, particularly at the moment because we are seeing quite a sharp shift towards rental away from owner-occupation.”
He said that the recognition of a slight extra appropriateness when it comes to lengthier rentals was apparently on the up, adding however that it would require time.
“The need for that guaranteed yield and locking in the yield could be a factor behind that,” he added.
He went on: “For those properties where there are likely to be void periods and issues then locking those yields in would be more attractive [to landlords].”
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