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The dreaded voids – now at an all time low?

Its every landlord’s worst nightmare – lost rent, however that happens. One of the reasons for losing income is voids. A void is that period during which the property is empty, in-between tenancies, and/or undergoing refurbishment. It means there is no income from it, even though it is costing the landlord money! The average void period is apparently a key indicator of how buoyant the rental market is.

Some say that rental voids are now at an all time low.  The average void period has fallen to an eight year low, showing that demand for rental property continues to remain high. According to Mortgage Introducer,

Compared with the previous quarter as part of the Association of Residential Lettings Agent’s (ARLA) survey of members, the average void period has again fallen from 3.6 weeks to 3.2 weeks.

The average number of new tenancies signed up compared to the preceding survey has also increased in line with seasonal trends.

Ian Potter, operations manager of ARLA, said: “The rental market is incredibly strong at the moment for those working within the industry but for those consumers who are relying on the Private Rental Sector for housing, the cost of renting must be of concern.

So, what am I to make of this? Firstly, that there is a seasonal trend. Second that the decrease in the average void period is small. Third that the cost of housing in the PRS may be increasing?

The Mortgage Introducer goes on to say that:

Average void periods for rented residential properties are already short with nearly eight out of ten ARLA member offices reporting averages of four weeks or less per year.

The South East has experienced the lowest void period at just 2.9 weeks compared with 3.3 weeks for Central London and 3.4 weeks for the rest of the UK.

The average void period of the whole country is down quite sharply and is the third consecutive fall. Average voids have decreased in all three main geographical areas with the greatest decrease being for those outside London and the South East (from 3.9 to 3.4 weeks).

There’s various reasons for this, some of which are interlinked. There was an influx of “accidental landlords” in 2009 when those who could not sell were forced to rent out their homes, creating and oversupply, and forcing down rents- quite significantly in some areas. The level of voids varies from one part of the country to another. The figures here quoted are average, and as with all statistics, we should be careful how we interpret them. When quoting statistics, what tends to get left out is the “spread” of the data set. That to me, would be useful along side the average.

Some in the industry, say here that if a landlord uses a “good agent”, then there should never be void periods. Ha! I don’t agree, but then again, I’m not sure how to define “good agent”.  Someone queried my learned friend’s use of the word “never”, and it was revised to “majority of the time”.  A lot depends on how proactive the landlord/agent is, and whether or not the outgoing tenant allows viewings during the last month or so of the tenancy. Some are so fussy about “their right to privacy” and wanting to be at viewings, that its almost impossible to get viewings done!!

And what happens when tenants go AWOL? or are evicted? That adds its complications. But then again, the cynic in me would probably say there will be those who come back with “I’ve never had to evict a tenant” and all that jazz. Hey hum. We live in a world where on one cap fits all and where we all go through different experiences even if we all apply the same principles and processes. That’s life!

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