Success in the letting industry hinges largely on the ability to find good tenants. And while it may be obvious what makes a good tenant, most landlords will agree that it’s not as obvious where to find them!
Portico looked at the profiles of 300 tenants who have moved into two bedroom properties across London, to offer an idea of exactly who’s renting wherein the capital.
Knowing your tenant market is lucrative
Knowing the prevalent tenant type in an area is not only interesting, it is also extremely useful in terms of knowing how to present your property to achieve the best rental price. In fact, many who are considering buying a property to let choose a specific type of property in a specific area, purely to attract a certain tenant type. Others are more specific in their tenant search. For example, a landlord who is offering his or her home complete with expensive furniture may not want a family with young children or pets.
Camden & Bloomsbury
If you have a property in Bloomsbury or Camden, there’s a very high chance it’s occupied by a student.
In fact, 73% of the tenants who recently moved into a two bedroom property in Bloomsbury were students (hence the low tenant average age of 28), compared to 62% in Camden. A high percentage of the students renting in Bloomsbury are foreign students studying at nearby UCL, and a lot of the students renting in Camden are from the equally prestigious Royal Veterinary College.
As a landlord, students may not be your first choice of tenant, but our view of students is very different to the image often depicted in the media – and that’s probably because we deal with them day-in day-out. In fact, letting to students is extremely advantageous for landlords for the following reasons: they achieve better rental yields; there’s anannual market for new students;rent is guaranteed by a parent or guardian, and rent is also paid very promptly and typically by direct debit.Moreover, if a foreign student doesn’t have a UK Guarantor, we accept 6 months’ rent in advance, (which our landlords alsoseem to like)! Students are willing to pay a premium to be within walking distance of the university, and expect little furniture other than a bed, sofa and a desk.
Clapham, Fulham & West Hampstead
Looking to rent your property out to young professionals? You’ll find them in Clapham, Fulham and West Hampstead.
Clapham and Fulham are part of the south London “banker belt” and the buy-to-let market has certainly benefited from City bonus money. A huge majority of the tenants work in finance – from junior to mid-level to senior - and the young tenant average age of 29 (Clapham) and 30 (Fulham) reflects the wideexperience range.
We also discovered that West Hampstead also has a high percentage of young professionals working in finance. The tenants living in NW6 however are in more senior positions than those in Clapham and Fulham, and the average salary and age of a tenant is higher too.
Young professionals are usually the most desirable tenants for landlords. They typically have university qualifications, a reliable, above average income, and they are prepared to pay premium rent prices to live in a popular area. They also tend to look after the property very well as they can afford a cleaner.
They do have very specific requirements, however. Young professionalswant to be within walking distance of a Tube station for commuting into the City for work, and often expect broadband to come with the property. They are typically looking for one or two bedroom contemporary properties, and will often turn a property down if it doesn’t come with a washing machine or a dishwasher.
Battersea & Dulwich
Battersea and Dulwich - (a.k.a Pram Springs and Nappy Valley) -tend to attract older tenants who have moved from the Clapham area to get more for their money and increase their standard of living.
We looked at the profiles of tenants who recently moved into two bedroom properties, and these tenants were typically professional couples who were thinking of starting a family. Families in the area were looking to rent larger properties with three or more bedrooms. The average tenant age in Battersea is 31, and in Dulwich it’s 30. A large number of tenants in Battersea work in finance, but an even higher percentage (20%) work in professional services. Coincidently, Dulwich also has a high number of tenants working in professional services (22%), including health, education and manual labour.
Although the average tenant salary wasn’t as high as in other areas–£42,392 in Battersea and £36,718 in Dulwich - tenants who work in professional services are considered extremely reliable as they’re unlikely to change jobs. They are looking for value for money so are prepared to be a little further out, and a Tube station isn’t a number one requirement. They also don’t necessarily require a fully furnished property, as they usually bring a lot of their own furniture to the property.
Acton & Hammersmith
As large areas located on the outskirts of London, Acton and Hammersmith attract tenants looking for value for money rental properties.
35% of tenants in Acton and 25% of tenants in Hammersmith work in general business roles, so there are people of all ages in a range of different jobs in the areas. Though they’re a little further out, both areas offer fantastic transport links, ideal for the large number of tenants commuting to office jobs in the City.
Despite quite a high average age, tenants in Acton and Hammersmith have low average salaries compared to tenants renting in other parts of London - £30,569 in Acton and £38,060 in Hammersmith. Property types vary considerably to suit the range of tenants renting in both areas, as do rental prices. The majority of tenants however are working long hours with long commutes, so they’re looking for modern, furnished rental accommodation that are easy-to-clean and maintain. A lot of developments are being built to accommodate for these tenants, with many offices being demolished and rebuilt as flats.
Highbury & Islington
If you want to attract older tenants with a disposable income, head to Highbury and Islington.
Tenants in Highbury have the highest average age at 35 and average salary at £62,568. A lot of the tenants work in finance and general business, the majority of which are managers or in very senior positions. The average salary is also very high in Islington at £54,424, and the average age is 31. The job range is more varied however, with a large number of tenants working either in professional services or in general business roles, but also a high number of tenants in creative, media roles.
These tenants are prepared to pay a premium to live so centrally, in areas with such fantastic amenities. They’re typically looking for properties with a bit of character rather than newly built flats, and are usually happy to take a property unfurnished.
Robert Nichols is managing director of Portico London estate agents.