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Key Takeaways:
- Property management solutions in London can boost a rental property’s profit potential by streamlining operations to ensure the property is up to standard and fully compliant.
- Vacancy is a common problem that can be minimised through flexible letting strategies.
- Operational challenges are becoming costly, which is why efficiency is essential to keep costs at a minimum.
- Compliance is critical in London, and staying on top of the ever-changing rules and regulations is a must to continue operating a rental property.
- Property technology brings transparency, providing landlords with real-time insight into their property’s performance without the burden of being in the midst of the operations.
The Need for Property Management Solutions in London
The private rental sector in London is still one of the most lucrative markets in the world. The Office for National Statistics’ September report reveal that the average rent in London is £2,253. This revenue potential hints at a high demand for rental accommodations, which also increases the competitive nature of the market as it attracts more property investors.
Apart from being competitive, the rental property market in London is also heavily regulated. This means landlords who want to succeed in this market should step up to secure a good share of the demand.
This is where property management solutions come into play.
Property management solutions in London focus on integrating expertise and technology to maximise rental yields, ensure compliance and improve a property’s overall performance.
Managing a rental property in a competitive and heavily regulated city such as London requires dedication, hard work and expertise. It all becomes more complicated as landlords deal with the ever-changing tenant demands, evolving regulations and rising costs of living.
To thrive in the local private rental sector, landlords must choose the right property management solutions in London. It’s not just about maximising yields. It’s also about finding effective solutions to day-to-day challenges, so it elevates operational efficiency and compliance.
Common Property Management Challenges in London
Did you know:
Slow response to maintenance and repair issues is one of the main reasons why tenants are not satisfied with their landlord’s services.
The National Tenant Survey reveals that 64% of dissatisfied tenants cite repair and maintenance issues as the primary reason for their discontent with their landlord’s service.
This is strong evidence that property management plays an important role in the success of a rental property. If you want to be profitable, you need to understand the common challenges rental properties face and the best solutions to overcome them.
Based on our observations in managing hundreds of shortlets, midlets and longlets, here are the top 4 issues that City Relay had to help property owners overcome.
Inconsistent occupancy
Although rental properties in London enjoy high demand, occupancy rates still fluctuate as it’s influenced by economic shifts, local events, seasonal demand, etc. In London, the void periods average 15 days, which is the time between tenants moving out and moving in. If the average rental fee is £2,253 a month, this equates to approximately £1,126.50 loss of income.
To avoid void periods, you need to implement a flexible letting strategy. City Relay uses this to adjust the letting approach depending on the market preferences and seasonal demand.
For instance, during the peak season, we will use short-term letting to maximise the nightly rates and take advantage of the high demand. When the off-peak season comes, we will switch to either mid-term or long-term letting to make the property more appealing. The nightly rates may be lower, but both letting strategies offer a more stable stream of income over a longer period (3 months or more) while addressing the property’s inconsistent occupancy rate.
Operational complications
One of the toughest challenges of property management is the daily operations, especially in short-term rentals. It can be time-consuming because you have to deal with frequent turnovers, out-of-hours calls, urgent maintenance issues, and rent collection, among other tasks. It can be overwhelming, especially if you’re managing multiple properties.
It doesn’t help that the maintenance and repair costs are rising. According to one study, the average annual cost of property upkeep in the UK is £1,374.07. This is expected to keep rising as inflation continues to push service charges, contractor fees and insurance premiums higher.
To solve operational complications, you need to get a comprehensive property management solution that will cover all tasks. City Relay provides an end-to-end property management service that covers tenant/guest communication, rent collection, compliance checks and maintenance coordination. Our in-house housekeeping and maintenance team ensures that any repairs or issues with the property are promptly addressed. This eliminates the need to pay expensive third-party contractors who may be slower to respond to calls. This will help you save costs and increase your profit margin.
The immediate response would also elevate the satisfaction level of the guest or tenant. This increases the chances of getting a positive review, which in turn will make the property more appealing.
Regulatory risks
London’s private rental sector is heavily regulated, and it’s becoming increasingly complex to keep up with the changing rules. For instance, the Renters’ Rights Bill is in its final stage and is targeted to come into force before the year ends. This is expected to reshape the rental market, and landlords should stay updated to ensure compliance.
Apart from that, there are also upcoming changes with regard to the new EPC “C” rating minimum, Decent Homes Standard and other changes in the Building Safety Act. As all these come into play, non-compliance could mean hefty fines or the inability to continue renting out a property.
Working with a property management company like City Relay, which monitors legal and regulatory updates, will help you stay compliant. They will ensure your safety certificates are updated, risk assessments are done, and the right standards are followed. Guest and tenancy processes will be adjusted to follow recent legislation, and expert management will ensure the property is not at risk, penalised or damaged.
At City Relay, we also use Opago as our proprietary platform to track the compliance certificates and safety check schedules of all properties we manage. You’ll be notified of upcoming renewals and inspection schedules to ensure compliance.
Communication gaps
Providing real-time service means eliminating communication gaps. Fast responses and transparency can elevate the experience of a guest or tenant staying in your property. Unfortunately, this can be a tedious task for any landlord, especially if they are only doing it part-time. Communication gaps could lead to friction over maintenance requests, booking updates or even rent payments.
City Relay has an in-house support team that handles all calls and concerns in real-time. Together with our in-house maintenance team, we can promptly deal with issues so that it doesn’t lead to major repairs.
We also have a digital solution through our Opago platform. It ensures transparency and real-time reports as it automates payment tracking, maintenance requests and financial reports to keep landlords on top of their property’s performance. This transparency and data access improve the service provided, so guests and tenants have a smooth stay in the property.
FAQs About Property Management Solutions in London
How much does a property management service in London cost?
The cost will vary depending on the type of service that you’ll request. The cost for shortlet, midlet and longlet management will also vary. Make sure you get a breakdown of the services provided and the associated costs so you can check if you’re getting the best value for your money.
City Relay offers a commission-based fee for our end-to-end property management service. This means we only earn when your property does.
What can I do to reduce my vacancy periods in London?
Flexible letting strategies allow you to switch between short, mid and long lets, so you can adapt to the fluctuating demand throughout the year. For instance, opting for short-term letting during peak seasons allows you to take advantage of the higher nightly rate. At the same time, opting for mid- or long-term letting lowers your rental rates but gives you income stability during off-peak seasons.
City Relay’s flexible letting model is backed by data-driven technology that allows us to shift strategies and to ensure maximum rental income throughout the year.
What compliance obligations do landlords face in London?
Landlords in London must comply with the typical safety standards for all properties. This includes electric, gas and fire safety checks. There are also new tenancy rules that will be implemented under the Renters’ Rights Bill before the end of 2025.
Working with a property management company makes it easier to monitor changes, ensuring properties are always compliant.
What can property management companies offer apart from higher revenue?
City Relay offers more than property profitability. Our expertise ensures maximised occupancy, premium property conditions, reduced maintenance costs and full compliance.
Our Opago platform will help landlords stay on top of their properties’ performance without getting involved in the daily operations. This makes the whole experience as stress-free and financially rewarding as possible.
Boost Rental Yields Through Professional Property Management
London’s private rental market offers an incredible opportunity for landlords, but it also comes with several challenges. Fortunately, there are property management solutions that can deal with these issues so they don’t compromise your property’s earning potential.
Navigating the complexities of the city’s rental market doesn’t have to cause you stress. By working with experienced and reputable companies like City Relay, you get a flexible, tech-powered solution to the common property management challenges.
It’s time to maximise returns, reduce risks and enjoy a stress-free experience. Find out how City Relay’s property management solutions in London can protect your investment and simplify rental operations.
