Sunday, Oct 28, 2007
Both sales and rentals softening
Primelocation.com: Prime London sale and rental prices decline for the second consecutive month
Average prices for prime London property for sale decline for the second month in succession, down 1.3%
and wiping over £14,000 off the value of the average London home.
The market for prime London property to rent witnesses a drop in average rental prices monthonmonth,
down 0.8% in September 2007. However, stock levels have hit record levels, up 9.6% since August 2007.
[Spotted this while looking for a new place to rent - looks like Assetzzz and the BTL brigade may be wrong with their forecasts of rising rents]
Posted by dohousescrashinthewoods @ 09:34 PM (664 views) Add Comment
4 Comments
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1. dohousescrashinthewoods said...
The PDF version is available here: http://media.primelocation.com/content/priceindex/priceindex_200709.pdf
2. Ihopeitgoeswithabang said...
I can see than anyone and everyone involved in property seems to have been sent to the same school of Gordonomics.
I will also need to check my dictionary for a definition of the word "slow".
Since it seems to be used quite alot where "minus" figures are involved.
Up to this point in time I had always believed that anything with a ( - ) minus attached to it was a decline, maybe a drop or a correction at best.
Playing with words like they politicians. Gordon would be so proud to see so many people adopting his grasp of the English language.
3. whiteknight said...
Yes. This will have to be the case.
Of course once BTL people have exited, the number of properties available to rent will fall - thus balancing the classic supply/demand and price equation.
However, it doesnt take a genius to work out that the sums currently needed to vaguely approach covering a mortgage at current prices simply won;t be able to be afforded by anybody atall.
In one area of London, asking rental on a 4 bedroom house jumped from around 600 per week to 850 per week in the space of two years.
850 per week!!
Meaning you need 44,200 AFTER TAX income just to pay the rent. Forget the bills, savings, investments,food or anything else ..... just to pay the rent.
4. inbreda said...
I think there are a lot of empty properties held by Buy to Hold landlords, who want to keep the interior spotless so it can be sold as new rather than second hand. Somewhere between flipping and BTL. I think these properties will return to the market and when they don't sell they will rent. I also think that falling prices will encourage many would-be FTBs to double-up or move back to mum and dads. Once they realise that they CAN afford to buy they will save for a deposit as much as poss.
So basically I think there are reasons why rents won't rise.
Besides for a BTLer to 'exit' they need to sell the property - the most valuable of which will probably have tenants and would need to be sold as BTL - so no change in supply or demand for rents.