Negotiate a Lower Rent for your London Flat

During the recent slump in rental prices much of the media trumpeted advice to tenants looking for a flat to rent that it was time to negotiate a lower rent. How wrong were they! Their readers probably pay too much rent for their home. It is always time to negotiate the best rent, in boom, or slump, market conditions have nothing to do with bagging a great deal, but you won’t get the best rent without a keen eye, attention to detail, and a skillful approach. Here are the 10 steps to negotiating yourself a better rent …….. but please always keep step 10 uppermost in your mind.

1. Who are you negotiating the rent with?

It is totally different to be negotiating directly with a Landlord, than to be negotiating with an agent. Also whilst some Landlords delegate totally to the agent, most – either through their own wishes or a reluctance of the agent to take responsibility –  will conduct the negotiations themselves. Agents tend to take an ambivalent stance – they principally represent their own interests and their main concern will be that the Landlord rents the property through them rather than through some other agent. Apart from that issue they have few other concerns about the course of the negotiation, and consequently you are quite likely to be able to put them in a position where they are negotiating on your behalf in order to protect the deal.

Most importantly – know that you are negotiating with the right person. There is no point in striking a deal, only to find that your partner in the negotiation has been over-ruled, or that you are up against negotiators playing Team Tag.

2. What do you want from the flat?

Be clear about what you want to rent, how long for, how much you can afford, what level of service you require, what part of London you need to be in, how close to transport. You need to be clear about what you can be flexible about, and what are deal breakers for you. Not only will it greatly strengthen your position to be certain about your requirements, but the respect that you will gain from the other party for your negotiating certainty will be translated into real tangible concessions which won’t be available if you are considered a “time waster”.

3. Research the London Flat Rental Market.

A Landlord or an Agent ought to know their own property, and the market it is in – but so should you. Do your research and be sure that you know the value of a property and it’s strengths and weaknesses before opening a negotiation. For each of the flats strengths work out an argument for why that has limited value for you. Identify each of the weaknesses.

Most importantly – know what is a reasonable rent to ask for the property.

4. Rental Options – other Flats

Always have alternatives. if this is the only flat in the world that you are prepared to rent then you are a fool to negotiate, snap it up at the asking price! If not, then have the alternatives prepared, and always be prepared to walk away. You cannot negotiate without alternatives!

5. Avoid asking for a reduction in rent.

Always try to get the other party to make the 1st move – of course as the flat has been advertised at a rent already, you have already achieved that objective. You won’t be able to get a rent changed by more than about 5 – 10%, and so if the asking price is 10% or more above your target you won’t be able to negotiate it satisfactorily. If you haven’t made a gross error in your valuation, then the Landlord/Agent has. Express great enthusiasm and admiration for the property, leave your contact details and walk away. Do not be tempted to enter into a negotiations until the asking price has been dropped to within 5% of your target. Any property being advertised at more than 10% over it’s market value won’t be getting much interest, and will still be vacant and available in a few months. However the Landlord/Agent is either unscrupulous or stupid, and you should ask yourself if that is the sort of person that you want to rent from.

6. Open by Selling

Once you have decided to start a negotiation you need to convince the other party that they want to rent to you. They need to like you, trust you, and know that you will look after the property and pay the rent. Sell yourself and your integrity.

7. Establish the Rental Contract

Establish the Rental Contract – not the legal stuff, but the practical issues of what’s included, and what isn’t. Are the furnishings all staying (or do they belong to the outgoing tenant!)? What Bills do you have to pay? What services are provided? You don’t want to find yourself negotiating a moving feast.

8. Scope for Rent Negotiation

Probably the most important and simplest step, but one that so many people feel intimidated or embarrassed about. You just ask a simple polite question:

“Is there room for negotiation in the Rent?”

From this point you need to be as quiet as possible, because the less you say the more the Landlord/Agent will tell you. Read between the lines of the following replies to see the messages that this simple question will elicit . Typical answers will be:

“I’m sorry we’ve only put the flat on the market today, and we would like to see how it goes at this price”

“I’m sorry we’ve only put the flat on the market this week, and we’ve been swamped with viewings and are sure that it will go at this price”

“I’d have to ask the Landlord, he is one who decides how much we discount his properties by”

“I’m sure we can be flexible, but it would have to be a very good offer”

“I’m sorry – we have 7 other properties which have all rented out at this price”.

There is a massive amount of information in those answers.

This will lead you to the soft price – a negotiated price that anyone can get by asking for a reduction. If there is no movement in the price that is not a bad thing, if it indicates anything it indicates a landlord who is confident that he has valued his property reasonably and fairly – just the sort of person that you want to rent from. However this is the point at which to challenge the valuation of the property, identifying all it’s shortcomings, and using powerful, pursuasive, polite arguments to revalue the rent.

9. Best Price Rent

Having established the best rent available – which may very well be the asking price, now is the time to turn on the afterburners, and get that all important best price. This can only be achieved in 2 ways:

either by offering the Landlord something in exchange for the better price – and you need to identify what you can give the Landlord that will make it worth their giving you a better price than anyone else. Only you will know what they need and you can offer, examples could be:

• Redecorating for them.
• Furnishing for the landlord (bear in mind furnishing expenses for a landlord are not tax deductible).
• Advance payment.
• Repairing problems in the flat.
• Letting them use the garage for storage because you don’t have a car.
• Cleaning and looking their other local properties for them
• Offering a long contract

or by getting the Landlord to make a concession which is more valuable to you than it costs them. Again, only you will know what you are prepared to put up with in exchange for a rent reduction, or what extra service you want included in the rent, examples could be:

• Getting them to pay the utility bills because the house has expensive electric heating
• Getting  them to provide unusual furnishings (e.g. TV or PC)
• Getting the Letting Agent to reduce their commission to secure the deal

A common example of this accommodation between tenant and landlord has become common in University towns where Landlords rent houses to groups of Students for 12 months, but charge only 50% of the rent over the summer when students typically go home, or travel, only requiring the house for storage. The landlord gets the use of the house over the summer for maintenance and redecoration.

10. Powerful Pursuasive Polite and Prepared

The way to successfully negotiate involves having your arguments ready, and it very particularly does not involve the Alan Sugar stereotype of bullying the other party into submission. Not only does that negotiating style simply not work – after the contract has been signed, you are going to have to live with the other party!