With the huge increase in demand for Private Rental Sector (PRS) houses in the past year or so, more houses than ever are coming to the market for rent, however, even this new level of supply is not meeting demand, and so this also means that many properties are coming back off the market just as quick as they entered it.
You’ll have heard the term ‘generation rent’ before, and it means that more and more people every year can’t afford to get themselves on the property market, meaning they need to rent, or let, a property.
Difference between let agreed and Let?
Let agreed simply means that when a property has been put up for let, the landlord has agreed to let it somebody pending the relevant paperwork being completed. It means the property is longer on the open market, but that the property hasn’t been completely removed just yet.
If a property is for let, it means it’s on the open market and you can apply to rent the property from the landlord, usually through an agent or estate agent. If the property is advertised on a property website such as Zoopla or RightMove as ‘to let’ then it means applications are open, however, if it’s advertised as ‘let agreed’, then it means the landlord is in the process of agreeing the let with somebody else. Let agreed means it’s in the process of being finalised and the landlord isn’t currently accepting applications.
Is Let agreed a good sign?
Well, that very much depends on your perspective. If you’re looking for a property and it says let agreed, then chances are you’re going to be disappointed.
If you’re a landlord then it’s great news because it means you’ve managed to let your property out pending acceptance.
If you’re looking in a particular area for rental properties and there’s quite a few let agreed, then it’s likely a popular area where quite a few people are looking so chances are you’ll need to be quick to bag yourself a good rental property there.
Do estate agents show let agreed?
Broadly speaking, yes, most will do. They’ll generally like to show a let agreed property as it means they’re good at letting out properties and it will attract more business.
Some may not at the request of a landlord until everything has been agreed and the deposit paid, but that’s unlikely to happen particularly often.
Can let agreed deals fall through?
Yes, let agreed deals can and do fall through, which is one of the main reasons they’ll still be advertised on property sites in order to ensure that if the deal does fall through they can quickly change the advert and start taking applications again.
Let agreed deals can fall through for various reasons, such as a prospective tenant failing a credit check or being unable to find the deposit money. Most let agreed deals do go through, but there are occasions where something goes wrong.
What is a holding deposit?
When you rent a property you’re always required to pay a security deposit, usually one month’s rent, in order that the landlord has some money kept aside in case you damage the property or go into arrears on your rent.
A holding deposit is slightly different in that it’s usually not as much and is only required to take the property off the market or mark it as ‘let agreed’.
For example, an estate agent may ask you for £150 in order to take the property off the market whilst your application paperwork goes through and your credit check. Once all of this is completed, you’ll then be asked to pay the rest of the security deposit.
Can a holding deposit be refunded?
Yes, in most instances a holding deposit is refundable. As mentioned, there are circumstances where a let may not go ahead, such as a failed credit check or a change of circumstances.
Most reputable agents and estate agents will state that a security deposit is refundable, and if your agreement goes wrong for any reason, you’ll then be given it back.
The tenants journey
Most of the time a tenant’s journey will follow a familiar path.
- When the tenant has found a property that they’re keen on they’ll put in an application. The agent will usually pass this to the landlord and if there’s more than one, a landlord will usually pick the one they like the best and the tenant will then be asked to put down a security deposit to take the property off the market.
- That will then mean that the property is ‘let agreed’ and will then be displayed as such on most property websites and with the estate agent too.
- The estate agent will then usually perform the relevant checks with income, references and credit checks and ensure that everything is above board before the application is completed. It’s at this point where any issues may arise and cause the deal to collapse.
- Once the application has been confirmed and approved, the tenant will then be asked to pay the rest of the security deposit and pick a date to move in and sign on the dotted line.
- The tenant will then move into their property.
What does let stc mean?
Let ‘stc’ means ‘Let Subject To Contract’ and is usually just a reworded way of saying the same thing. It means that a tenant has put in an application and that it’s been accepted pending further checks and the signing of the tenancy agreement and other contracts.
To summarise
In the property market, if you’re looking to rent then usually there’s an application process where you need to provide proof if ID, proof of your income, provide references and go through a credit check.
This process can take some time and so whilst this is being done an estate agent or landlord may want to take the property off the market, so they don’t get bombarded with applications. The tenant applying will be required to pay a holding deposit whilst this process goes through.
Once a holding deposit is paid, this is considered as let agreed, and will be advertised as such. These deals can and do fail, however, so rather than completely removing the listing, most will simply pause it whilst the application is processed.
Once the application has been completed, the listing will be taken down and the paperwork will be signed and completed.
