We look at steps tenants can take to reduce the risk of getting gazumped when renting a property.
By Esther Shaw
As competition for homes in the rental sector hots up, tenants could find themselves falling victim to gazumping.
Normally associated with sales, this is where your offer on a property is accepted, but then subsequently turned down because a higher offer is placed by another buyer.
At present, with such a high level of applicants fighting over a lower than average number of properties, the practice is now spilling over into the UK rental sector.
Long gone are the days when potential tenants could haggle over the rent: the tables have turned, and more and more are now losing out to gazumpers who are putting in a higher offer at the last minute.
Priced out of the property market
The problem is being compounded by the fact mortgage lenders have tightened lending criteria, with many refusing to offer higher loan-to-values (LTVs) – thereby forcing prospective first-time buyers to remain as tenants while they try to save the hefty deposits required.
This, in turn, has led to rents rising sharply, and a scramble to find a suitable home to let.
Fierce demand for rental homes
New findings from property services group Countrywide show there are now an average of 4.4 tenants vying for every property across the UK, while estate agent Douglas & Gordon says some properties are being let within hours of coming to the market.
Elsewhere, Findaproperty.com says one in eight property-hunters experienced rental gazumping in the past 12 months.
“The short supply of affordable mortgages is keeping more and more people in the rental sector,” says Nigel Lewis, property analyst at Findaproperty.com. “This is creating enormous pressures as demand outstrips supply, and a more cut-throat rental market emerges. Previously, gazumping had only been a frustration among those looking to buy, but rental gazumping is a new trend, and one that we can only envisage increasing during 2011.”
Where is rental gazumping rife?
Industry experts say the trend is particularly prevalent in the lower-priced sector of the market, with some one- and two-bed rental properties now going for well over the asking price.
This is particularly bad news for those who are desperately trying to save for a deposit, and who want to rent as cheaply as possible while they build up their funds.
Elsewhere, agents are also reporting rental gazumping at the upper end of the market – for family homes – where there is a limited supply of good properties, but huge demand from families who want to take advantage of good schools and transport links.
Reduce the risk of getting a gazumped
If you’ve fallen victim to rental gazumping in recent months, you may be feeling increasingly desperate, but there are steps you can take to reduce the risk.
In the current market, you need to be on the ball, keeping a close eye on the many property websites to ensure you’re the first to spot new flats and houses to rent when they are posted online – and that you’re the first to visit them.
Preparation is vital, so make sure you get any necessary documentation and references in place, and have the deposit ready in advance, so you are ready to proceed; also “sell yourself” to the landlord by pointing out that you have a steady flow of income and will pay the rent on time.
You should then try to push through a written agreement as quickly as possible: until a contract has been signed, the landlord is free to change his or her mind about who to offer a tenancy.
Crucially, you need to be flexible when viewing properties in this market, as with rents rising, and so many other potential tenants fighting for the same few places, you may need to make a few more compromises.
Even if the property is not exactly what you thought you were looking for, ask yourself if it ticks enough boxes, as the likelihood is that if you don’t snap it up, someone else will.
