Wednesday, Apr 29, 2009
More pent up supply
Telegraph: Buy to let: Double whammy for amateur landlords as flat rents fall
LuckyOne found this on the forum. It comprehensively destroys the myth of pent up demand or rising rental prices.
Posted by paul @ 11:49 AM (1248 views) Add Comment
6 Comments
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1. mark wadsworth said...
Any sensible analysis of the housing market has to start with the basic fact that rents and incomes rise (and fall) more or less in line with each other.
There was never a 'bubble' in rental values or a 'boom and bust', rents just chug along as a fairly fixed % of disposable income - if disposable incomes are going down (more unemployment, higher food and fuel costs) then I would expect rents to fall slightly (but not dramatically).
2. timmy t said...
Mark, I hear what you're saying but supply & demand rules certainly play out in this market too. When there are too may flats to go round and they all look the same, let's face it the cheapest one will go first. I am quite suprised that with no FTB's willing to come in to the market renting has held up better. All gone home to live with Mum & Dad so saving up to buy no doubt.
3. japanese uncle said...
Save public sector workers, nearly all workers will have to accept more or less pay cut for the next three to frive years at least. Rents are destined to go down, and actually they are.
4. japanese uncle said...
Incidentally, rents for the expats workers in Tokyo (typically 130 sqm, nice vicinity, good facilities) used to cost 1 million yen (GBP 6500) per month in the 1990's. Now the same flat costs no more than 400,000 yen/month. Many areas in London will definitely follow this path.
5. maddison said...
Dubai same thing has happened. Rents have fallen dramatically as incomes come under pressure
6. mander said...
Rents are 50% overvalued. Unempolyment is a major issue here. Tenants will default for the same reason: too high prices. I wonder who is insuring landlords against these massive defaults? Do you see profits coming out of this insurance activity?