Thursday, May 22, 2008
Increasing yields but also increasing supply...
Sales slowdown lifts buy-to-let: BBC News
RICS survey indicates more properties are being let, because their owners can't sell them. Gross yields are also up apparently, but with the increase in supply of properties to let I wonder whether this increase will soon reverse.
Posted by doom&gloom @ 08:39 AM (1045 views) Add Comment
22 Comments
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1. little professor said...
Exactly, this doesn't really make sense. Increased supply of rental properties should be pushing the price down. We will see.
2. Conrad said...
vi propaganda... the information war has begun
3. Cityboy said...
An increase in the rental demand must mean that there are more flats/houses empty at the moment. But they won't be for long with the increasing mortgage costs. So rents to fall.
4. Colin Camper said...
The BBC are definitely setting an agenda. How could a huge increase in reluctant BTL possibly 'lift' buy-to-let.
It's a disaster for buy to let. I live in a prosperous NW seaside town and the rents on family properties are down 20% on 2 years ago.
5. paul said...
Someone is obviously telling porkies. Not like RICS to do anything like that ...
6. ontheotherhand said...
They are careful to say yields are rising, not rents. Well the BBC is not careful since a sub title says 'Rent Rises', but RICS talks about yields the whole way through. Yes, when a property that was 'worth' £300,000 with a rent of £12,000 is now worth £270,000 and the rent remains flat, the yield has gone up from 4% to 4.4%.
7. marcus b said...
AH-HA, 'more properties are being let because the owners can't sell them' - I understand now! I have been reading various articles which imply that rental yields are so good that the BTLers have decided not to sell their properties, but rent them out instead - because now they can make money on rents rather than capital gains! What a load of rubbish, I realise now that the reason they aren't selling is simply because they CAN'T! They never mention that in VI written articles...
8. jonb said...
Increased yields could be because house prices have fallen by more than rental prices have. It doesn't necessarily mean that rents are up.
9. uncle tom said...
It might be innocent, but the phrase 'buy-to-let' seems inappropriate in the headline; 'rental market' would have been better.
These stories tend to miss the point that no-one in their right mind would be enthused by an extra £100/month rent when the capital value is dropping at £2,000/month; nor do they often express much concern at the plight of tenants who can't afford to pay.
The Beeb should wake up to the fact that it's being fed by vested interests..
10. jack c said...
'more properties are being let because the owners can't sell them' - I suggest if they half the price they'd get an immediate sale !
With rising BTL mortgage rates my other thoughts are that the landlords are almost certainly having to dig deep into their pockets as the rent will not cover the IO mortgage payments.
11. confused76 said...
Stuart Assetz once told me that rents always go up. My assetz!
http://www.primelocation.com/house-price-index/
"prime London sale and rental asking prices fall for the first time in 2008, while prime country property produces only marginal gains
The latest data for April suggests that the prime London property market may be finally starting to go the way of the mainstream market, with average asking prices falling for the first time in 2008, down 0.6% since March"
12. confused76 said...
BBC is saying total porkies!
HPC Administrator,
is there a way to blame and shame these VI opinions on our home page. Like instead of having the useful links (now not so useful since consensus points to a major correction) could you replace with a "Top Ten Porkies" list?
Just an idea...
13. paul said...
Q. I wonder, when was the last time the RICS survey revealed FAILLING rents?
A. Never.
14. Zippys said...
name and shame list gets my votes, often these muppets/experts make statements and are never held accountable.
15. Delboypass said...
Maybe people lack the art of haggling....
16. denzil said...
Bumped into a EA whilst having a sauna a couple of nights back. He pretty much tells it how it is and is not the anti-christ as many on believe EA's to be. He re-iterated press talk about the bottom falling out of the market but did comment that properties £400,000+ were selling reasonably well. I can back this up as I've noticed a surprisingly number of "SOLD" signs around my area. The area he operates in is not typically BTL but he did comment about BTL and word on the street with the VI's is that the housing market will go into melt-down if BTL's start to bail. If non-BTL do not need to seel, they can sit tight, BTL may just rush to the exits en masse. This fact probably explains the amount of spin on BTL over the last few days (led by cheerleader-in-chief the BBC) about how rents are increasing. Personally I'm not seeing rent increases and neither are other people I know who are also renting.
It's not clear to me what involvement and expertise RICS have with the rental market, but they are a respected voice who the BBC are quite happy to publish verbatim.
17. harold said...
Denzil, I think might be right about the BBC's overt support for BTL - the BLT sector is the Achilles’ heel of an already badly diseased body, and the property market will be completely stuffed if and when the BTL brigade exit. The BBC appear to be trying to keep the gig going a little longer, possibly so the big boys can exit quietly, round about ...now.
18. harold said...
"the BLT sector"
That's the bacon, lettuce, tomato sector!
Oops, lol
19. titaniccaptain said...
One thing I have noticed on right move and property finder is that you see "Sold Subject To Contract" on a number of properties as you do in the streets............next thing you know the "SOLD" sign is down and its back on the market same goes for Rightmove and property finder...............Sales are falling through big time as people are pulling out or haveing unsucsessfull guzunders
20. jack c said...
@17. titaniccaptain - purchases/sales are also faltering because mortgage offer letters are now no longer valid for as long as they once were - 3 month validity is now fairly typical and in some cases if the proposed purchase falls outside of this the lender wont extend the offer and the deal falls through. Couple this with "down valuing" and more stringent lending criteria and this explains why the Sold signs go up and down. People need to undersatnd that exchange of contract is the point where the sold sign should go up.
21. titaniccaptain said...
@jack c
yep
22. Free2breathe said...
Massively agree with titan. "Sold Subject To Contract" must have appeared at least 3 times since last summer on a cluster of barn conversions at an old farm in the village only to be replaced with "For Sale" each time and usually with a different agent.
Completed 2 years ago for £385,000 "per barn" now asking £310,000.... BUT, a beautiful 4 bed across the road is bigger and better located and now up for £295,000.........OH DEAR!