Last Update, 26th July, 2016. Getting the best deal, whether you are about to make an offer to rent a property or if you are re-negotiating to extend your tenancy, is about the sum of the parts: rental price, clauses, condition & concessions. See our guidelines below and work yourself into a better deal.
1. Be Specific. When negotiating the rental price, come up with your own weekly or monthly figure – you must be specific: so for a flat being marketed at £525 per week say “I will take the flat for 12 months at £500 a week” rather than be vague: “I would like the flat, but I think it’s a bit expensive.
When I was anxious about asking for a discount I would be vague and hope the agent or landlord would mind-read me and give me a discount. It didn’t work. Then I plucked up the courage to ask for £40 less, per week in rent – I got £20!
2. Perception. Negotiation is perception not reality. So if you make the landlord perceive you as the best choice (see how below) and paint a picture of the market or property that makes them believe what you are saying, they’ll agree.
3. More than Money. Think about more than just negotiating price. Getting other concessions thrown in such as: a 6 month break-clause, rolling notice period, redecoration or new furniture can be more valuable than a slightly reduced rent. If you are struggling to gain anything from the landlord, at least ask for him to pay for the inventory inspection on check-out, or for the professional clean at the end of your tenancy – this could be £100 – £200 you save.
4. Agents vs Landlords. If you tell an agent you want a 10% discount on the rental price because there are better properties for the same price, they will call your bluff. Landlords are more likely to believe you could be right as they don’t see similar properties each day. Appeal to an Agent by saying you’ll be quick to sign a contract and all your credit and reference checks will be solid, if they negotiate you a discount – they just want to rent the place and move on. Appeal to a Landlord using facts (or ‘perceived’ facts) like property condition versus other rental properties, or figures (“there are plenty of similar 2-bed first floor flats available at £50 less a week”).
5. Politeness. Always be polite, professional and courteous. Landlords after all own the property and if they don’t like your attitude they won’t listen to your offer or demands. Appealing to their human nature by being friendly, responding quickly and providing information (references, financial details) fast when they ask will win you their favour and maybe a discount.
About to make an offer to rent a property? What should you consider when deciding whether to offer the asking rent or less?
A. Your budget. Always remain within your budget. A superb property is no use if you don’t have enough money left to spend elsewhere.
B. Competition. Are there alot of other people searching for a similar property to rent? You can tell by how quickly similar properties have rented. If, many times when you enquire, the property has already gone, it’s a competitive market. Should the properties you are looking to rent have high demand, paying the asking rent is usually the best idea. Then negotiate extras (below) to compensate for paying full price.
C. Time on market. When a property has been marketed for more than a month with no takers, you should always ask for a lower rental price. In general discounts of 5% to 10% are likely to be matched if the landlord is starting to get worried about void periods. Anything more than 10% is worth asking for if the property has been empty for more than 6 weeks.
D. Determine the market: what have similar properties rented for recently – agents should be able to tell you and be reasonably honest (ask a different Letting agent than the one you want to make an offer to, to be sure). Lots of similar properties available? Ask for a 10% discount on the basis you have alot of choice (always explain your reasoning). Always ask for a discount if the property is in a block of flats or estate of houses where several properties are up for rent at the moment – landlords will be keen to get their tenant before others and will often come down in price.
E. Your position. Do you have time (at least 2 months before needing to move)? Can you afford to miss a couple of properties and wait for another to come along? Do you have the choice of living in many streets in an area, or even the choice of two or three areas? Should you be relaxed like this, take your time and ask for a discount.
Lacking time (less than a month left), want a property in a certain street or location, worried you won’t have much time for viewings? Better to offer the asking rent or just slightly lower to secure the property.
F. Your financial position. Can you put down 3 months rent instead of the 1 or 2 months the landlord requires? Are you able to pay 3, 6 or 12 months rent in advance? Landlords love cashflow. If you can pay them more in advance (and if you are prepared to), offer to do this if they reduce the rent by 10% or more.
G. Believe you would like to stay in the property for more than one year? Ask for a 10% discount if you are prepared to stay for 2 years and a 15% discount if you would sign up to a 3 year contract. Certainty can make the discount seem sensible to the landlord.
Are you already renting and wanting to stay on and renew your tenancy contract?
When renewing a rental agreement, landlords often undertake a ‘rent review’ – they look at the rental market and see if similar properties are now renting for more (or less) than the rent you are paying. Should they think they could get more rent for the property, they will ask you for it. Remember that if you’ve been a good tenant, you have leverage – a landlord prefers to keep a tenant with a good record than have to spend time and money finding a new tenant. What can you use to your advantage to ask for a cheaper rent?
A. Paid all your rent on time? Do you pay by direct debit? If so and you have shown a strong record of payment, mention this in your rent review. Landlords value people who pay on time, every-time.
B. Kept the property in immaculate condition? Tell the landlord you have done so and ask them to come and visit the property (at a pre-arranged time) to see for themselves. Tidy up before they arrive (or get a cleaner in) and make the property look like a show home with fresh flowers, looking neat and tidy. When they see how well you keep the property they’ll be keen to keep you on (even at reduced rent) as after being paid each month, their next concern is the property being kept in good condition.
C. Research the market. Should you find you can rent a similar property for the same price or less, tell the landlord. Same thing if they are asking for a 10% increase and you think similar properties would only be 5% more. Tell them you are prepared to move unless the rent is a ‘market rate.’ This puts pressure on them as Landlords hate the cost, hassle and potential void periods associated with finding a new tenant. They always respond well to numbers and facts. After all this is a business for them, not a hobby.
D. Start early. Begin negotiating at least 2 months before your new contract is due – this way the landlord knows you have time to move out, so you have more leverage over him or her.
E. Bargain late. Should you be prepared to pay the rent the landlord is asking for, to renew your tenancy, you could play the ‘last minute offer’ game. Most concessions come in the last 20% of time left to negotiate. Offer a lower rent in the last 2 weeks (that’s 2 weeks before you must give notice to move out, not a fortnight before the tenancy has ended), point out that landlord will incur new finding costs and clean up plus redecorating costs if you move (they know this, but it’s worth reiterating) and use the minimal time left to pressure them. If they say no and take a chance on you leaving, you can always say you’ll ‘agree this time’ and pay the rent they demanded.
F. Your financial position. Can you pay 3, 6 or 12 months rent in advance? Landlords love cashflow. Should you be able to pay in advance (and if you are prepared to), offer to do so if they reduce the rent by 10% or more.
G. Believe you would like to stay in the property for more than another year? Ask for a 10% discount if you are prepared to stay for 2 years and a 15% discount if you would sign up to a 3 year contract. Certainty can make the discount seem sensible to the landlord.
H. If you decide to move out – do tell your landlord well in advance, at the latest give the notice required in your contract (often 2 months). If you don’t yet know the exact date you wish to move out, speaking to the landlord or letting agent early and explaining the situation can get you some extra flexibility. Your current landlord may be asked for a reference by your new landlord – so be nice to them and give good notice if you want them to be nice in your reference (and supply one quickly).
Clauses should rarely be deal breakers. If you can get them added into the contract, it is worth doing so. Timing is a question here: when negotiating to move in, it is best to ask for these just after you have negotiated or agreed on price. Should you agree to pay the asking price rent then ask for these as a ‘concession’ for not receiving a discount.
Renewing your rental contract? Ask for these to be included to keep you at the property – tell the landlord they are as important as the price of renewal.
Break Clause – this allows you to leave the property before the full rental term has finished. So for a 12 month rental, it is common to ask for a break clause after 6 months. Once you are into your sixth month you can ‘give your notice’ and are free to move out after the notice period (often 1 or 2 months). Ensure the landlord is obliged to let you stay the full 12 months if you so wish – i.e. you have flexibility, not them. This also means they can’t increase the rental price on you during the first year of tenancy. Break clauses are best to negotiate when looking to rent the property for the first time, or if you are renewing a rental contract and the landlord won’t agree to a rolling notice period (below).
Rolling Notice Period – ask for this if you are renewing your rental contract (if they say No, ask for a ‘break clause’ as listed above). Example of this would be a 2 month notice that you can give at any time, and move out once the 2 months is over. Ensure the landlord can’t give you notice for a full year – this way they can’t increase rent on you by giving you notice either.
Nuisance Clause – it’s far less common to have a clause such as this, yet far more valuable these days. A nuisance clause would state that if a ‘major nuisance’ disrupts your ‘quiet enjoyment’ of the property you would be entitled to a reduced rent for the duration of the nuisance or if the issue were not resolved in 3 months, you would be entitled to leave with no financial penalty.
Examples of such nuisances would be: building work to the property or neighbouring properties, where noise and dust levels are high. A major issue with plumbing, electrics or heating that is not resolved within a week.
Noise from neighbours that is so loud you register a complaint with the local council, which is upheld, yet the noise continues. Flooding of the property. Excessive levels of damp (basement flats).
As there is no easy way to define what could be a nuisance and when it is unreasonable, this clause can be hard to insert, however it’s worth asking as some agents and landlords have used these before and could have a sample clause they can place in your contract.
Redecoration / Refurbishment
Feel free to ask for anything from repainting of rooms, to a new cooker or a new piece of furniture. Always ask at the time of negotiating the price and contract. Let the agent or landlord know if this is a ‘deal breaker.’ Should they refuse, consider if you would pay slightly more in rent if they were to say yes, or offer to pay part of the cost (no more than 25% as you won’t get the benefits once you leave).
“If this article helped you, please say thanks by hitting one of the share buttons below.”
Need more help? Email us at: info@LondonAndProperty.com