Saturday, Apr 26, 2008
Not all roses in the rental garden
FT: Rents squeezed by flood of properties on to market
"Rents in some areas could fall this year as agents are seeing a flood of available properties, a drop in corporate lettings, and an unwillingness from tenants to lock into new, more expensive, rental agreements."
Posted by letthemfall @ 10:28 AM (1069 views) Add Comment
15 Comments
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1. last_days_of_disco said...
Anecdotally his is exactly the case in Luton.
Reasonably nice four bedroom Edwardian places available for 650-800 GBP per month, near reasonable schools. My mortgage for a small flat is getting close to that! And rents are going down, not up in Luton as far as I can see. Also the places are not being snapped up. Seems quite a few are available fully furnished and a pile came on the market this month.
I wonder if other people have similar stories?
Please try and avoid unnecessary anti-Luton sentiment ;-).
2. paul said...
Shouldn't the headline actually read
"Flood of properties brings falling rents"
The only people its "squeezing" are the miserable buy to let investors.
3. uncle tom said...
I thought the exodus of BTL speculators, and increased willingness of young people to rent while waiting for the market to correct, would propel rents during the first half of the year.
However, local 3 bed estate houses are being offered for much the same rent as a year ago, and there's not much anecdotal evidence of rent increases elsewhere.
I can see some landlords trying to pass on their increased mortgage payments to their existing tenants - and getting a concise reply...
4. japanese uncle said...
Here is the excerpt of my previous post, earlier this year.
-------------------------------------
As tens of thousands 'urban luxury flats' should flood in the market, whether buy or rent, FTBs in waiting should be spoilt for choice at cheaper rent (or price for purchase) for the foreseeable future. Wait and see is the only good strategy for the time being.
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5. mark wadsworth said...
There's a nice house up for rent up the road from us, they want to sell it for £800,000 or rent it out for £1,700 pcm. That's a return of 2.5% nominal. Anyway, we're off for a viewing, more anon.
6. mark wadsworth said...
Re the article in The Times about tighter BTL lending criteria that was posted yesterday, I have ground the numbers over on my blog. To me it looks like a fall in BTL prices of about 30%. Tee hee.
7. Jayk said...
I don't doubt this in city areas such as Leeds, Manchester et al, but the evidence from suburbia and more rural areas supports the view that rents are increasing to cover landlords' additional costs *and that people are paying it*.
In my area rents are up 20% since August, and friends in Sussex, Surrey and Berkshire report the same. Properties aren't staying on the books for long - especially 3+ bed houses. I know, because I can't get one and I'm willing to pay the approximate 1,000pcm required (it was around 825pcm last summer). Not because they aren't there but because they are grabbed quickly by tenants.
Rumours of BTL's death are, sadly, greatly exaggerated. But I do hope that changes soon.
8. uncle tom said...
Mark,
Your 'fun with numbers' is pretty much spot on - the mortgage lenders are now making BTL effectively impossible for new entrants who have less than 50% deposit.
If you want more fun, try looking up the SVR rates the exisitng BTLers are finding themselves on when their fix ends, then take all the deductions off the headline rental income (typically 40%) and work out how much they are having to top up their nett rental income to cover the mortgage payments.
Multiply that number by ten to make up a typical portfolio, make an inspired guess as to how much spare cash they sitting on (zilch?) and then make a guess as to how long it will be before either a) They try to sell up - or b) their mortgage lender repo's the lot.
9. uncle tom said...
Strange - I didn't put that link on - will it do it again?
10. dohousescrashinthewoods said...
(close link)
11. little professor said...
The problem with this situation is the lack of security for the renter. I'm looking to rent in Leeds, and there are plenty of dirt-cheap city centre flats available, but I've got no way of knowing if the landlord is a clueless BTLer who is going to get repossessed a month after I move in.
12. uncle tom said...
prof,
I wouldn't worry too much, just insist on a long lease.
If your landlord gets repo'd there's a sporting chance you'll be able to dodge a rental payment or two in the confusion, and if you give any prospective buyer the impression of being the tenant from hell, then there's always the chance you'll be able to buy the freehold for a song...
13. Mark Wadsworth said...
Re my comment No 5, the house is roughly the same as where we are renting now ... and £600 pcm cheaper. Hmmm. That's what I call a moral dilemma ...
14. it_is_going_with_a_bang said...
Prof.
I wouldnt worry once you are passed a month or two in there you will be passed worrying.
It takes alot of effort to remove anyone from a property unless they want to go.
It is very likely any lender would simply wait for you to move out if you were only on a 6 month agreement.
They would need to go to court to remove you and any judge worth his wig is just going to let you stay until the end of your agreement.
15. Orwell said...
What's Greenbay's take?
Greenbay?