Negotiating a tenancy offer: landlord guide

Landlords Jan 18, 2022

Every landlord wants the best price possible when putting their property on the market. However, the highest bidders aren't necessarily always the best option for your property. Many factors are worth considering, from the tenant's character to how long they intend to live in the property. The negotiation process isn't always straightforward, and there are plenty of competing considerations to balance when assessing an offer.

We've put together this guide so that you can feel more confident when it's time to agree the best possible tenancy terms for your investment.

Rental price

Understandably, you want to get the highest possible price, but it may take quite a bit of negotiation to get the offer you want. This is especially true if there aren't loads of offers on the table. Most landlords list their properties on the rental market hoping to get the asking price, but local market conditions (such as renter demand and availability of comparable stock) will usually determine the feasibility of achieving the desired offer.  

To secure the best deal financially it's best to look at the overall picture. What type of tenant is moving in and how long do they want the tenancy to last? A renter looking for a two or three-year contract might pay less than the asking price, but they also offer more security in the long term and will save you money on fees and costs associated with void periods.

There are many factors to consider when negotiating a tenancy and the rental price is typically top of the list. You should absolutely get what you feel is fair, but being open to negotiating within a realistic range while considering the long-term revenue generated by a lengthier tenancy at a lower monthly rent.

Special terms and conditions as part of the deal

Some tenants might ask for special clauses as a condition of their offer, particularly if they are offering above asking price for the property. It's good to have an idea of the type of tenant you want and what you will and won't allow in the tenancy, but it's also helpful to approaching each offer with an open mind and assess applicants on a case-by-case basis.

For example, a renter might wish to bring their pet with them, in which case you need to weigh up the pros and cons of renting to a tenant with pets. Or they might ask for minor fixes around the property or for you to include extra furniture or appliances, such as replacing the washing machine with the washer-dryer.

Your first instinct might be to reject these requests, but it's worth thinking about the long-term picture. If a tenant asks for something like a washer-dryer, there's every chance that other renters will require this too, or that it might give you a competitive edge over comparable properties when finding new tenants in the future.

Special requests in an offer also give you additional leverage to negotiate higher rent during the tenancy. Also, if granting a few of their additional requests means they are happier in the property, they will be more inclined to renew at the end of fixed term and stick around for longer.

If they're asking you to paint the flat an entirely different, non-neutral colour, then you're probably better off entertaining other offers. However, if costs are calculated and weighed up correctly, you can make more revenue over the lifetime of a tenancy by striking the right balance between additional upfront expenses and monthly rents.

Ultimately, it comes down to which special clauses you're willing to agree to, what you feel is reasonable, and what concessions you require from the renter in order to accept any extra requests.

Tenancy length

The length of the fixed term is another crucial condition of the tenancy to be hammered out during negotiations. The standard contract is 12 months with a six-month break clause, allowing both the landlord and tenant to end the agreement after six months. However, this isn't the only option on the table.

While it's true that tenants tend to prefer an element of flexibility when moving to a new place, they still want security and a place they would be happy to stick around in if all goes well. In fact, the average tenancy length in the UK is on the rise and currently sits at around 4.1 years.

From your perspective, a longer tenancy means guaranteed rent and no void period. Shorter contracts lead to higher tenant turnover, which means losing out on rent, disruptions to cash flow, and the possibility of dealing with increased wear and tear.

There's no set way to approach tenancy length unless you're determined to let the property for a set amount of time (e.g. you want to let your main for a fixed period while you are away). However, it's usually best to either secure longer fixed terms even if it means accepting an offer than might not have the highest asking rent or charge a premium for shorter tenancies.

Break clauses

Many landlords and tenants believe that break clauses are mandatory, but that's not the case. You're under no obligation to include a break clause in the contract, though inserting one could be a wise move as it gives you a degree of flexibility if the tenancy doesn't work out.

Again, including a break clause after six months in a 12-month contract is pretty standard procedure. It's also common for 12-month break clauses to feature in a 24-month contract and 18-month clauses in 36-month contracts.

Some landlords insist on having a break clause halfway through the tenancy, while others see it as a risk because a tenant who leaves after, let's say, six months means the landlord needs to go through the whole tenant-find service again.

However, the last thing you want is to end up with a bad tenant for the entire contract duration. Break clauses can help the tenant exit the tenancy agreement early, but they also give landlords a get-out clause should they need it.

Understanding your bargaining position

Your position at the negotiation table ultimately comes down to several factors. Your own financial situation will play a role – if you have a mortgage on the property, you might be more inclined to accept a lower rental offer and longer contract length for security. If, however, you're in no rush to let the property, you can hang on until an offer comes along that you're completely happy with.

The dynamics of supply and demand in your local rental market also have a significant impact on the strength of your bargaining power. An in-demand neighbourhood with a low amount of stock will see homes rent for high prices. Alternatively, a postcode with lots of stock might see renters making lower offers because they have plenty of options.

Before putting your property up for rent it's worth researching local conditions and seeing what's happening with other properties. It can give you a better picture of what to expect with your own property, raising or tempering your ambitions in the process.  

Summary: negotiating an offer

Getting the right deal is vital for a good tenancy. You don't want to accept an offer that will leave you feeling resentful or committing to conditions you don't feel comfortable meeting, especially as the rental contract will likely last a minimum of 12 months. On the other hand, it's important to avoid setting unhelpful, unrealistic expectations. That's why researching the market and approaching offers with a keen sense of your negotiating leverage can lead to a situation where all parties get the best possible deal, and both you and the tenant form the basis of an excellent rental relationship.


At Home Made, we offer a hybrid lettings solution that adds value at every stage of the rental process.  With our proprietary technology and data-driven marketing processes, we can help you to achieve higher rental yields and significantly lower operating costs, all while providing exceptional customer service that improves the rental experience for all stakeholders.

Our median time-to-let from point of listing is just 8 days and our clients save an average of £2,300 per tenancy with us. We charge 3% plus VAT for tenant-find services, 4% plus VAT per month for full management services, and there are no fees for renewals. For more information on our services, visit our landlord page.

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