[brainclamp]

I have done a little research last night in light of the 'revised' immigration figures the government recently admitted to the other day (up 100,000 per year) and how it affects supply and demand.



The conclusions I am starting to make of this most massive demand factor on housing supply are distirbing for people locked out of the housing market and renting for at least the the next 3 year period.



If demand for dwellings outstrips supply - prices rise.
If rental demand for dwellings outstrips dwelling supply- Rents rise.

The pattern of immigration demand follows the pattern of the service sector jobs in the SE and then elsewhere, as these are where there are 'skill shortgages'. (i.e. pay would rise otherwise)

Supply : Net gains in dwelling Stock - http://www.odpm.gov....ouse_604024.xls

Demand : Immigration figures from the home office.

[Time to raise the rents.]

One of my own tenants asked for a 12 month agreement last week (rather than the 6 months I was offering - they've been there 3 years already).

Maybe they know whats coming.....

[STR@2%GY]

I'm not sure the rise in immigration explains the increase in house prices

saw this quote recently, in an ft article

Quote

John Butler of HSBC added that their explanations did not fit the facts: "If the pressure of a growing number of households is supposed to explain house prices, we would have seen big rises in the south of England, but they have been elsewhere."

The other thing is how would you explain the fall in rental yields over the same period?

[hawkeye]

Banbury,Oxfordshire (just in South East). Article in this weeks property paper on Rental Market. Article was like a plea to landlords to lower prices if they wanted to let. The agent was quoting an oversupply via BTL activity as the reason for lowering prices.

[STR@2%GY]

the chart isn't displaying. I uploaded it to a free geocities account, and it says "The web site you are trying to access has exceeded its allocated data transfer.
Access to this site will be restored within an hour. Please try again later.". So i created another account..



Webmaster, isn't there some way we can upload graphics to the HPC site?

[London-loser]

Time to raise the rents., on Oct 29 2004, 11:28 AM, said:

One of my own tenants asked for a 12 month agreement last week (rather than the 6 months I was offering - they've been there 3 years already).

Maybe they know whats coming.....

<{POST_SNAPBACK}>

And how much did you "raise the rents" on them?

And did they agree wholeheartedly?

[Bubble Pricker]

I do not believe that immigration has a significant effect on house prices. The immigrants housing market is a totally different market. I know a lot of immigrants, and those I know are, if anything, at the "higher" end. They live in low-quality property, like ex-council flats and old housing stock, in cramped conditions, usually 2 to a room and the lounge used as a bedroom as well. I don't want to know in what conditions illegal immigrants live. Asylum seekers (the majority of new immigrants staying in here, at least temporarily) have no impact on the housing market, because they live in social housing or dedicated centres.

I believe the whole immigration supporting housing demand theory to be ********. There is very little immigration at the "upper end", economically speaking, i.e. people into skilled jobs that will earn enough money to even think about entering the housing market. The population of almost all western countries is gradually declining, despite immigration, and this will lead to an oversupply of property in the long term.

[Yonmon]

Property Master, on Oct 28 2004, 11:16 PM, said:

They already are rising... hamiltons said up 15% last quater.

PM

<{POST_SNAPBACK}>

And if I said they fell by 15% last month would you believe me. No? Good!
So why do you believe b****x like rents up 15% last quarter.
The reality on the ground in London at least is static rents/slight falls.
Although I don't believe they will fall as far as house prices I think it inconceivable that rents will materially increase overall in the short/medium term

[brainclamp]

Rental demand fell - along with the recession in the city, as there was a crash in equities as private workers pensions ('us mugs') disappeared during 2002.

With super low interest rates, the value of cashflow streams increases like houses and businesses. Money policy works with a lag (about 2 years), as Keynes said - Assets values rise on the balance sheet, but after a lag, it moves from the balance sheet and into the economy as people have a desire to spend excess cash.

What we saw when rents and jobs dropped was people downsizing away from the city. Now jobs are back on, and the Labour market is tighter and immigration is at seroiusly vast levels - whats changed? The quantity of money in the economy, but *** not inflation in services. ***

Does it matter that immigrants are not taking luxary penthouses? If rents rise - yet inflation stays roughly here - because a work permit worker is doing a job cheaper than you can, so you get no wage rise - the BTL investors will be buying the penthouses!

I have heard some pompous crap - but people claiming large scale immigration of new workers doesn't affect the housing market takes the biscuit.

You can see in the graphs we now have 1/3 of a million people - just in immigrants - every year who need dwellings, ***** it doesn't matter that the birth rate is dropping - it could goto Zero (they do not need houses for a long while!) ***** and they get rents paid for by companies/agents/housing benifits/taxpayer.

We have a supply of new dwellings that doesn't even come close to matching this.

Rents will rise where there is such demand.

P.S. all that graph shows is Rental yields fall (because prices go up!!)

[Keefter]

I'm a bear, look at the Avator! I truly believe in the imminence of a HPC.

Whilst the market is falling demand for rented accomodation must rise its very simply! how can the number of people renting drop whilst no one is buying? is everyone off to live abroad or moving back in with their parents? I doubt it.

I'm afraid all of those of you insist on disagreeing with every word BBB says are in danger of sounding very stupid. You can't have it all ways, I'm a big fan of the supply and demand argument in respect to HPI, its no different IMO for rentals and as such the cost of rent will increase as the demand does.

The newest BTL's like say last 9 months will be the ones who struggle not everyone is in the same boat as them, they will try to raise rents and price themselves out of the market. Those shrewd property investors i.e. those hwo bought years ago and made a livlihood out of it have nothing to fear, in allot cases they will own most if not all of they're portfolio outright.

[brainclamp]

STR@2%GY, on Oct 29 2004, 12:01 PM, said:

I'm not sure the rise in immigration explains the increase in house prices

saw this quote recently, in an ft  article
The other thing is how would you explain the fall in rental yields over the same period?

<{POST_SNAPBACK}>

The fall in rental yields is because houseprices have rocketed up to such an extent that the yield is not far off the base rate.

The extent of the recession caused jobs and rents and houseprices to fall in the S, but I suspect rents are now starting to pick up.

Immigration flows are bigger than ever, so can only push demand one way.

[STR@2%GY]

Quote

Rents will rise where there is such demand.

P.S. all that graph shows is Rental yields fall (because prices go up!!)

My point is that immigration started to rise sharply from 2000 onwards, and therefore should have been driving rents upwards during that time as well. The evidence from the yield graph is that rents have failed (dramatically) to keep pace with HPI.

You also seem to be suggesting that this is a new phenomenon, the effect of which is yet to be felt, and I'm saying that all those who immigrated in 2001, 2002, 2003 must already have had an impact on the market. Unless they are living in cardboard boxes and biding their time...

[Crazy88s]

New immigrants with zero assests cant afford anything, may be they can club together and rent a dosshole so perhaps there is an increases demand on rents.