Saturday, Feb 16, 2008
Rent are less than advertised...
Guardian: Welcome to negative equity street
More about Manchester's sorry buy to let flat scene. And the advice, if you are renting:
While the estate agents in the city had clearly given up for now on property sales, many were still keen to talk up the rental market as "strong".
But even that proved to be something of a fallacy, if you are the landlord, that is. While the demand for flats to rent remains buoyant, a chat with some of the army of young office workers that rent many of the city centre flats soon revealed that the prices quoted were just a guide. "If a flat's rental is advertised for Ģ700 a month, you offer Ģ600, you'll almost certainly get it for that. It's a buyers' market, no mistake," I was advised.
Posted by sacred contracts @ 01:48 PM (637 views) Add Comment
8 Comments
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1. new_order said...
700-600 a month for somewhere in Manchavster. What a 4king joke!
2. Danski said...
I bought a flat in Manchester off plan for 192,000, I am suing the owners for falsly inflating the price and saying it had parking. The valuation included parking but when I exchanged it didnīt. Lots of people have been misled over greedy developers. I am in this for the long term so I donīt mind taking the hit on rent, but many will go down the plug hole
3. Letthemfall said...
So much for a shortage of housing.
4. drewster said...
I concur, this is exactly what I've seen on the ground in Manchester. It's been the case for a couple of years now, the price you see advertised in the glossy magazines can easily be haggled down. If potential BTL investors are relying on the "asking prices" for an idea of potential yield, then they're in for a shock. Also, as new_order implied with his Manchavster joke, the quality of the tenants isn't always great. I don't recall being asked for a reference when I moved in, and the flat next door has seen a stream of troublesome tenants, unpaid bills, unpaid rent, etc.
The sheer quantity of new constructions is mind-boggling. Shiny new rabbit hutches are being built not only in the city centre, but in the suburbs too; anywhere the developers can find an unused piece of land. Many of the spaces are old warehouses or just open-air car parks. Sadly the local council hasn't done the sensible thing and turned some of that unused space into public parks: central Manchester desperately lacks green spaces.
@new_order: You have to pay Ģ600-700 a month to avoid the chavs in Manchester...
5. new_order said...
Big buildings, heavily armed civilian population, economic deprivation, lawlessness, important only by name.
If London is the new Moscow, Manchester is the new Stalingrad!
6. happyrenterz said...
I live in south Manchester, Whalley Range to be precise, not far from Moss Side and it is not so bad. Two bedroom flats rent for less than Ģ500. All the new builds in the city centre do appear to be a BTL graveyard. Perhaps this is where the UK HPC starts.
7. Yakov said...
600 to 700 !!! Not a chance. Even in Lymm (considered to be exclusive and close enough to Manchester for many footy players to live their) you can now get a two bed flat for 500 a month. If you go towards Irlam, eccles etc, you can bargain them down to 460. The BTL's are really scraping to get tenants in.
As for Manchester being the new Stalingrad. You're joking, Manchester is full of pussies, they wouldn't last a day in a Russian city.
8. drewster said...
The problem with new-build BTL is that it simply doesn't make sense. When you buy a new car, it loses 25% of its value the moment you drive it off the forecourt. New-build houses and flats are largely the same - there's a "newness premium" factored into the price. From a buyer's perspective, if there are two identical apartments side-by-side, one brand new and the other ten years old, then it is rational to prefer the new building. It will have untouched kitchens, clean communal areas, and no problems with existing neighbours. Furthermore, the new building will come with glossy brochures and special incentives from the vendor.
Bulls claim that there is a massive pent-up demand from FTBs, and if prices fall they will just step into the breach. This is patently false in the case of BTL flats: nobody wants to buy in a block where 90% of residents are tenants, for a variety of reasons (noise, security, maintenance, etc.). In the absence of BTL investors, few people will want to buy these blocks.
Buying a new-build for investment can make sense in some limited circumstances. When a new suburb is built next to an existing town or city, it is usually regarded with distaste and snobbery initially. However after a few years such areas can become quite desirable, assuming they have the right set of characteristics. Canary Wharf is one such example - although initially regarded with much scepticism (in both residential and commercial), it is now highly popular. Investing like this remains something of a gamble - many of the New Towns around London are still held in poor esteem, and haven't stood the test of time terribly well.