London tenants calling the shots

London tenants are making the most of their current strong position, according to property consultants Cluttons, which has noticed a shift in the power dynamic between tenants and landlords as people seek long-term security for their bargain rental.

The slow sales market is continuing to drive an oversupply of rental properties in London, with rents remaining low. Traditionally, landlords have been able to pick and choose tenants and dictate the terms of agreement, but the current fierce competition amongst landlords has brought about a role-reversal, with tenants calling the shots.

Tenants are now frequently seeking assurances over the financial stability of their landlord. They are also demanding long term contracts of a year or more with no break clause, to lock the landlord into low rents for as long as possible.

Lynn Hilton, partner for residential lettings at Cluttons, said: “London tenants have been quick to take advantage of their position over landlords. With so many rental properties on the market, they are happy to look elsewhere if landlords don’t accept their terms.

“Over the last few months it has become commonplace for tenants to question the financial security of the landlord, over concerns that the financial climate might lead to them defaulting on their mortgage. This perception of potentially high-risk landlords has led to many having to adjust their rental expectations.

“Tenant preference for long-term deals is also a new feature of the market. Traditionally, tenants have preferred not to be tied in to a property for too long, giving themselves the option to give notice after the initial six months, but currently landlords are the ones being locked into long-term tenancy agreements as tenants look to take advantage of low rent levels.”