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I'm moving to London soon and I'm trying to figure out how much higher, roughly are rent listings than the final rent landlords are expecting.
Let's take as an example a 1-bed flat in East London which is GBP 1,300 per month. Would you only negotiate if the flat was smaller or lower quality than other, similar flats? Or do landlord typically list the rent a bit higher than they expect to get in the end?
In the UK, you should usually expect to pay the listed rental price - and most people, in my experience, do - but you can sometimes negotiate a lower price. The degree to which it is possible to do so depends on local levels of demand. Demand in London is usually very high so I would expect your chances of negotiating the rental price down is slim.
In addition to rent, you will likely also be stung for rip-off estate agent fees, and you will usually need to pay an amount equal to one month's rent as a deposit. By law, this must be deposited into a deposit protection scheme that is independent of the landlord and usually means you will get it back either in full or with a fair level of deductions for damages.
This varies heavily depending on area and price point, but overall the current market London is heavily in favour of tenants in most areas contrary to most opinions. Current rental yields in most of London are sub 1.5% for landlords pre costs, so there is generally a lot of competition to secure good, long term tenants as it's so easy and cheap to rent for people vs buying (note this is cheap purely in yield terms vs buying - London rents are still pretty eye watering for most: its just that buying is even more eye watering).
It's also worth noting that London (and the UK in general) is a heavily saturated market of relatively unastute, baby boomer investors fearful of stocks, poor at calculating depreciation costs and who have only really seen a property bull market, who continue to think property is a great bet and continue to pile in pretty much regardless of the actual realities of the rental market, which heavily contributes to these very low yields.
As a result, Seeking out landlords fitting this profile will get you much better results than professional groups/players with 10+ properties who will be much more ruthless and yield savvy. Also looking for properties that have been on the market for a while often pays dividends - always remember landlords lose huge amounts on empty properties and will often take large reductions to fill something sitting idle - particularly if they have mortgage payments going out.
Once a reasonable place is identified, the general two key tactics when negotiating are:
stress you are a very clean, low maintenance tenant. Ask if they could recommend a good cleaner etc, discuss how bad some tenants can be in terms of long term damage/upkeep. Stress you really like the property but sadly can only afford x. You'd be surprised how much a good impression and acknowledgement and empathy with the problems they can face can make on a landlord.
negotiate long term rent freezes for subsequent years. Many London landlords are more than happy to agree to long term tenants at frozen prices for year 2/3, and often for 3+ years in renewals if the first period goes well. Also note this effect generally rises the better and longer you have been there - do a year plus in a property, never call for maintenance and keep it clean, and you can often negotiate rent decreases in the right areas (particularly places where new to market equivalent properties are the same price you are currently paying - it is very easy to just say you prefer the look of the other local place at the same price and you have a very strong position).
It's also worth noting that doing this well is quite a lot of effort and requires a fair amount of legwork/planning, hence why a lot of people just pay the asking price and move in as soon as they need to. Most of the people who think London is a hard place to rent are just people who don't do any research, fail to plan their moving times well and in advance, or are just terrible at holding their ground in negotiations, so don't expect much back if you don't put much in.
current market London is heavily in favour of tenants You dreaming. London ain't so, unless you are very lucky. The dealing tactics you mention of, won't get you a place in the prime London areas, maybe a bit father from Central London but that depends.
Jan 22, 2018 at 16:27
If demand for property is strong, the landlord may not be willing to negotiate. However, that's not to say you can't get a discount, especially if demand is weak (although that might suggest the property is overpriced to start with). I've twice asked for (and been given) a lower rent and once negotiated lower agent fees.
Your negotiating position will be stronger if the property is already vacant and you can move in quickly, or if the property is currently occupied and you want to move in fairly quickly after the current tenants are planning to vacate. Neither the landlord, nor the agent, make money on an empty property. Having examples of similar properties priced more more cheaply or even similarly may also you help negotiate the rate down.
If you look at sites such as Rightmove, you can see how long the property has been listed for and if the price has been reduced already.
Even without the above, sometimes a cheeky offer will be accepted if it isn't too far off the asking price. If you don't ask you won't get. However, unless the property is obviously overpriced or has some issue with it which would put off other prospective tenants, I wouldn't expect too much.
Agents are usually very reluctant to reduce their fees (they'd rather the landlord took a reduced rent!). Most times I've asked it's been refused (and I've walked away from properties as a result), with some agents incredulous that I would even ask, but as mentioned above, once I was successful.
Negotiation is most possible when there is a single prospective buyer for a single item; in such a case, neither party can complete the transaction with anyone else, and so the price is heavily influenced by negotiation skills. On the other hand, when there are many similar buyers seeking similar goods from multiple sellers, then a well-established market develops, and the price is set by the overall market rather than negotiation between any two particular parties. The stock market is a prime example: at any particular time, there is well-known "market price" that is set by the stock exchange. Ther is no room for "negotiation"; either you buy/sell at the market price, or your order doesn't go through. If you submit an order to buy at a price significantly lower than the market price, then unless there's a sudden crash, the market will simply ignore your order, and sellers will instead sell to one of the thousands of people willing to pay market prices.
So for your question, there are three questions to ask: How many similar buyers are there (and how similar are they)? How many similar units does this seller have? How many other sellers with similar units are there?
Unless you can think of something that really sets you apart from other renters, the answer to the first question probably is "thousands". If you're renting from a large company, the answer to the second question is probably "hundreds", if not "thousands". And unless there's something really unique about the unit, the answer to the third question is also probably "hundreds" or "thousands". So there's probably not much negotiation to be had, unless you can offer something the landlord finds valuable. For instance, some landlords might give you a discount if you sign a multiple year lease, or put up six months rent in advance, etc.
