London Rents Heading Downwards (For Now)

[kibuc]

http://services.parliament.uk/bills/2016-17/rentersrights.html

Interesting! When did this happen!?

http://www.bbc.co.uk/newsbeat/article/36502439/rent-fees-are-a-step-closer-to-being-scrapped

Wow, that would be quite somethig. I had a heated exchange with my LA the other day about my tenancy renewal (which ultimately won't happen) and charges it would incur. My view was I shouldn't be charged at all, as the LA doesn't provide me with any kind of service. They operate on behalf of my landlords as their representatives and make their life easier, so it's reasonable they should pay fees and/or commissions. My life, however, doesn't get any easier thanks to introduction of the man in the middle.

Fingers crossed the proposed law passes.

[Dorkins]

http://services.parliament.uk/bills/2016-17/rentersrights.html

Interesting! When did this happen!?

http://www.bbc.co.uk/newsbeat/article/36502439/rent-fees-are-a-step-closer-to-being-scrapped

Unfortunately this is an amendment from a Lib Dem peer so basically no chance of it entering law as it doesn't come from the Government. The reason governing parties like single party majorities is it means they don't have to take input from anybody else (even their own backbenchers), and usually they don't. The joys of first past the post.

Edited June 11, 2016 by Dorkins

[Neverwhere]

Evening Standard - Quarter of London flat-sharers 'would be forced out by £25 rent rise'

A quarter of London flat-sharers are so hard up that a rent rise of just £25 a month would force them to move out, according to a survey.

One in 10 say their personal finances are so precarious that even a £10 increase would make them seek new accommodation. If the rise was as much as £50 almost half of flat-sharers said they would be unable to afford their rent...

[Patient London FTB]

"With a quarter of the capital's corporate rental market driven by the financial services sector, the convulsions being experienced in the City will filter down to the property market within days," says Jonathan Hopper, MD of Garringtom Home Finders in today's Times.

[winkie]

Rents are decreasing, because voids and costs are increasing......

Edited June 25, 2016 by winkie

[Patient London FTB]

Bump - clear signs of the supply of 2-bed rentals turning into a glut near me in London, with huge amounts of newbuild still to come on stream over next 3 years. Also a hint that people are economising and picking 1 beds over 2 beds.

Late-entry London rental investors, whether overseas or home-grown BTL greedsters, are about to get their head handed to them.

[Wolfie84]

Good find.

Underlying data from 14/15 - 15/16 for all rents is pretty interesting. There's a lot of softening in nice areas.

City of London seems to be getting pummeled in rents and sale prices too, only about 10k residents tho.

Apologies if I'm missing it from earlier in the thread or elsewhere, but could you let me know the source for this? I'm in the middle of some negotiations over my rent and this would help me out! Cheers!

[Granit]

Yeh it's just raw VOA data, I didn't do anything to it apart from take one as a % of the other.

There's also:

ONS but it's not really showing declines so you might want to ignore it

Your move/Reed Rains buy to let index which is showing declines in London but it's only in pdf format

I was renting in London until earlier this year, I finished a 2yr fixed in March and I think the market rent of my house had probably fallen ~15%+ 2014-16 (based on identical houses on the same street). I tried to get a rent discount but the landlord wasn't having it. I left and the property has been vacant ever since, the asking rent has been reduced 3 times, and it's currently being marketed at 10% under what I was paying.

[Venger]

This is a pretty loose theory but I think there's another mark against the PRS (or at least a mark against a system where we have both OO and PRS in the same market). Rent volatility is a big driver of OO demand imo (anecdotally maybe even one of the bigger ones in London) and I think there's a dangerous cycle in play. Landlords can and do put rents up essentially whenever they choose -> people worry about the affordability of their future housing needs because they're struggling to afford it now -> the must buy now mania kicks in -> prices go up. Tenants having no way to accurately forecast what their rent will be beyond the next 6 or 12 months is a big risk in renting.

So buy then, if you want to. Even if part of that is true, we're all market participants.

Even your theory is held by enough people in part of finding excuses to buy at ever higher prices. It's a market. And one where prices ever higher in my local market. Mania buyers are individuals in market, just as renter-savers who refuse to pay these prices and expect buyer buying and rental value ahead. Market.

Some of expect HPC and some RPC. Some convincing arguments have been made for both those outcomes on HPC, and things are getting interesting with 3% - and tenants can't just pay what a landlord may like to charge. There are limits to how much they can hike rent, before voids and other issues. BTLers can't just hike rent 25%-50% and 'as they please' so easily in this 'uncertainty/fear' position. In a market reading we have to make choices.

If, if it occurs (HPC/RPC) then can't do anything about the buyers who chose to pay ever higher painfully high asking prices, including with Bomad help - including to a buyer my pal sold his apartment to in June (likely Bomad assistance). Market. Some tenants expect downward pressure on rents.

but I can chose not to hand over my savings and sign up for a whacking great repayment mortgage.

[Granit]

Can you post a link or would that identify you?

I wouldn't have posted it but I just checked and the listing is gone so they must have found a tenant, it was in Islington fwiw.

I'd guess on average that being a sitting tenant is better when rents are rising but probably not when rents are falling.

[Patient London FTB]

A couple of juicy comments on the London lettings market in the latest RICS report. Am sure thewig will appreciate the second ...

[InlikeFlynn]

I was renting in London until earlier this year, I finished a 2yr fixed in March and I think the market rent of my house had probably fallen ~15%+ 2014-16 (based on identical houses on the same street). I tried to get a rent discount but the landlord wasn't having it. I left and the property has been vacant ever since, the asking rent has been reduced 3 times, and it's currently being marketed at 10% under what I was paying.

One of my wife's extended family has done the classic "just rent it out, innit" and held on to their flat in crystal palace whilst moving a house outside London. The flat is empty because "rents are falling" according to their mother and they haven't priced it correctly. To hear her say this is extraordinay: I've known her for decades and she was always a dyed-in-the-wool property bull. The market (and sentiment) is really changing.

[Guest TheBlueCat]

I think quite a few EU nationals will leave the UK. Not just because they are now in legal limbo but because many believe that Brexit has sent them a message that they are not wanted here because of the racism/xenophobia associated with the vote. That should bring rents down a bit.

There might be some of that for sure. I'm also not buying the argument that we'll see a big spike of EU immigrants arriving before the rules change, more likely people will be put off from coming due to the uncertainty.

[iamnumerate]

The word recession and boom have become meaningless to many people's lives. If you pay very very high rent / mortgage, and haven't had a meaningful pay rise for years yet cost of living has shot-up (utilities/rent), you're likely in a personal de facto recession compared to if you were earning the same money, but paying a much lower cost to keep a roof over your head. So obvious, but has to be mentioned. I don't give a rat's ar5e about GDP gainz anymore - they just tell me that the UK is feeding and housing more and more immigrants when I see GDP numbers up, and that Osborne is borrowing £10Bn a month net loss plus paying back £1.2Bn in interest alone on the national debt. Might as well be happy your missus bought new stuff on credit that we can't afford to pay back. Whoopee. If the country goes into a technical recession, again I don't give a rat's ar5e unless it benefits me (this is not selfish, I am always told by Osborne to be delighted when GDP goes up yet it does not impact on my life whatsoever, and if it does, it will be a negative impact given its largely based on importing GDP AKA importing people).

Furthermore, while it is intangible to measure, there is such a quality in life known as stability. This is gone from many people's lives. I'd much rather have a stable life than being part of the precariat. And to be honest, with the way the UK economy has hidden all its horrors thanks to borrowing ten bill a month, we're probably all part of the precariat whether we think we are or not. Again, this is so sh1t - how to make any meaningful plans when you have to take a massive gamble (buying a property at peak of the peak of the peak) while the entire economy constantly teeters on the brink of disaster? Bah....

I agree. I calculate that I would need to earn £50k p.a more than my Dad did when he retired to have the same house as he could afford.

However someone buying today would need to earn £30k p.a more than me to have the same housing as I can afford.

I don't think either is fair.

[spyguy]

I think quite a few EU nationals will leave the UK. Not just because they are now in legal limbo but because many believe that Brexit has sent them a message that they are not wanted here because of the racism/xenophobia associated with the vote. That should bring rents down a bit.

No. The UK remains one of the world's most welcoming places for people working.

I do think the situation of tax-credits and HB will change rapidly.

If I was young + EUer and working then Id stay in Lodnon + rent.

If I was I was claiming benefits TC and/or HB then Id plan on leaving.

[Mrs Bear]

A LL I know has just renewed a tenancy - non prime London - for the 4th year to the same tenant. The rent has not been raised since the beginning, but this is the first time the letting agent has not urged him strongly, or in fact at all, to raise it just because he can.

Pretty telling if you ask me.

[Venger]

A couple of juicy comments on the London lettings market in the latest RICS report. Am sure thewig will appreciate the second ...

First person; appears to be his background; http://www.rightmove.co.uk/estate-agents/agent/Globe-Apartments/London-116980.html

My own personal view is perhaps more rentals (see second quote from Savills guy) moving from sales to rental (and not something I want to see either, although not unexpected when some owners can't sell it for 'what it is worth), puts more downward pressure on rents - and obviously impinges on other landlord interests, who are happy with the number of angels already in the rental side of the market (?).

Globe Apt rentals on RM. (Nothing on sales market when switch to buying).

Also appears to have rentals for short-term needs... corporate/leisure/medical http://www.globeapt.com/

[Bland Unsight]

Yeh it's just raw VOA data, I didn't do anything to it apart from take one as a % of the other.

There's also:

ONS but it's not really showing declines so you might want to ignore it

Your move/Reed Rains buy to let index which is showing declines in London but it's only in pdf format

I was renting in London until earlier this year, I finished a 2yr fixed in March and I think the market rent of my house had probably fallen ~15%+ 2014-16 (based on identical houses on the same street). I tried to get a rent discount but the landlord wasn't having it. I left and the property has been vacant ever since, the asking rent has been reduced 3 times, and it's currently being marketed at 10% under what I was paying.

This basically makes you The God of HPC until further notice.

[spyguy]

This basically makes you The God of HPC until further notice.

Well ata gross yield od 3% every month empty is 2 years yield. 6 months empty = 12 years gross. Chuck in falling prices and its fun.

[the_duke_of_hazzard]

I can't be bothered to write the long version down, but in my (prime) neck of the woods rents are getting even more insanely cheap than they have been for the last few years.

We're talking yields of 2-3%, before any maintenance costs. And those places are not shifting.

Even the wife is excited about what we can afford to rent now. When I show her the crap we could buy even she is committed to renting for the foreseeable.

Edited July 15, 2016 by the_duke_of_hazzard

[Growlers2]

Just browsing MySpareRoom which I haven't in a while.

Room cost in South London look very weak! Is it just me? Rents seem down in shit and trendy areas.

No science to it just first impressions from couple searches of areas I know well and have rented previously - shame MSR cancelled their rental index a couple of years back.

[SE10]

Well ata gross yield od 3% every month empty is 2 years yield. 6 months empty = 12 years gross. Chuck in falling prices and its fun.

Not following your maths, could you share your sums please

[Bland Unsight]

We're talking yields of 2-3%, before any maintenance costs. And those places are not shifting.

Even the wife is excited about what we can afford to rent now. When I show her the crap we could buy even she is committed to renting for the foreseeable.

This also merits a show of respect.

[Granit]

Has anyone seen the June lslps buy to let index? They normally come out towards the end of the following month but nothing was released in July afaict. I'm going to assume it shows -20% across the board until they release it.

[Patient London FTB]

Has anyone seen the June lslps buy to let index? They normally come out towards the end of the following month but nothing was released in July afaict. I'm going to assume it shows -20% across the board until they release it.

Still waiting for it to come out. In their defence the timing of their releases has varied a lot historically.