Member Article

North East rents down as region avoids “transfer window-style” bidding frenzy

• Figures are “boost to region“ after Centre for Cities “brain drain“ report

Rents in the North East fell by 3.1% last month as the region continued to avoid “transfer window-style” bidding frenzy seen in other parts of the country.

The cost of the renting a home in the UK rose by 0.9% in December with the average rent now £813 per month. North East rents fell by 3.1% to an average of £517, 4.4% lower than this time last year.

The fall in rents comes amid reports from other parts of the country of desperate tenants competing against each other at mass viewings and even the launch of a lettings auction website which pits them against each other in a bidding war.

Ajay Jagota of North East-based property business KIS Lettings believes the figures are a “boost to the region” as an influential think-tank warned of London “sucking in talent from the rest of the country”.

The firm manages properties for 700 landlords from branches in South Shields, Sunderland, North Shields and Welwyn Garden City and was named Letting Agent of the Year at the 2013 Landlord and Letting Awards.

Ajay said: “These figures are a boost to the region in the week the Centre for Cities warned of a ‘brain drain’ sucking talented young people to London. The North East still gives you quality affordable housing in a way the capital can’t.

“There’s evidence UK rents are starting to plateau, and that’s certainly what the figures indicate in the North East – and that is not necessarily bad news for landlords.

“Of course landlords want to get as much income as possible from their properties but bidding wars are much more suited to the football transfer window than long-term tenancies.

“At the end of the day the market will dictate the price people are willing pay to rent a property. If it’s too expensive, no-one will be interested – it’s a simple as that.

“More importantly, the best tenant isn’t necessarily the one who offers the most money. If you’re making potential tenants bid against each other there could be a risk of pushing the winning bidder further than they can afford, raising the risk of rent arrears later.

“Are you better off with one tenant paying one rent for six months, after which your property sits empty, or a tenant paying a marginally lower one for several years?

“If you look at commercial properties, our high streets have suffered over the last few years as landlords have insisted on charging the rents they once enjoyed when times were good, which was unsustainable for tenants in the current climate. It’s only recently they’ve taken a more realistic approach and shops are no longer sitting empty. It’s not inconceivable that something similar could happen with residential properties.

“Letting a property is about playing the long game – and the longer-term a tenancy, the better for the tenant and the better for the landlord.

“As for the North East and what it has to offer talented young people, I moved to the region to start a business – and was recently named Letting Agent of the Year at a national award ceremony. If you ask me, there’s nowhere better to start a business.”

This was posted in Bdaily's Members' News section by Ajay Jagota .