Thursday, May 21, 2009
Falling rents = even further for prices to fall
Telegraph: Buy to let: double whammy for amateur landlords as flat rents fall
Rents for flats have fallen for the sixth month in row in another blow for amateur landlords who bought new build flats in the hope of making a quick killing. The supply of rental flats rose for the sixth month in a row, increasing by 2.8pc during April to be 132pc higher than a year ago. The ongoing oversupply led to a further 0.7pc fall in average rents – the 13th month running in which they have declined. The high level of supply showed that it was still a tenants' market, and as a result, rents were not expected to begin rising until the second half of this year at the earliest. [This is important for house prices too. With falling rents, house prices need to fall further to bring the house price-to-rent ratio back to historical levels.]
11 Comments
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1. techieman said...
Sorry Drewster havent read the article just watched rodge the dodge on the video. I like the "ralet" "humps and bumps" comment. And of course - in this case - IMO he is right. All is forgiven Rodge!
He seems quite laid back here, was helping me relax with me cup of nescafe this morning!
2. drewster said...
techie,
Just watched the video too. Bootle repeats the strange idea that, although new-build flats have fallen in value, "leafy suburban homes may well be perfectly ok". I can't see how the latter are immune from the mortgage drought, unemployment, higher LTV ratios, and the rest.
3. crunchy said...
That's the golden goose drewster. Imagine how that would hit the banks balance sheets if they went in hard on that sector of the market.
I feel that more lieniency is being given to the top end, in the believe that these owners would be better positioned when the recovery
finally comes to fruition, as they see these professionals as the spearheads.
That's my take on it!
4. crunchy said...
LOL... just made a killing on the GBP/CHF look at that baby go! LUV IT!!!!!!!!
5. debtfree said...
Whatever happened to TimeToRaiseTheRents ?
6. paul said...
I like Bootle's comment too:
"Leafy suburban homes may well be perfectly okay"
Like the kind of house you live in then Rodge?
Dream on ...
7. crunchy said...
18 hours of GBP gains wiped out by the Swissy in minutes. Green shoots indeed!
8. Mark Wadsworth said...
Crunchy is talking about this, I assume.
9. crunchy said...
additional comment to 3... Could taxpayers money be going into propping up this sector of the housing market in the form of mortgage
holidays and other favourable deals?
10. Agentimmo said...
I know an amateur landlord. Tells me this week that his flat is about to receive its 3rd tenant in 12 months as the other 2 have done runners previously. Says many like him are being hit by this dodge. Seems the less wealthy, desperate tenants have cottoned onto the fact that the amateurs can be easily ripped. They spend 6 months somewhere. Pay for 3. Default on 2-3. Then scarper. Thus paying a max of 6 months rent in any one year. LL's are so desperate to fill their BTL's to avoid voids, that checks are not usually carried out....just get someone in the door who says they will pay the rent.
All good fun !
11. mander said...
Rents are double, no one in the rest of the world pays that much for rent.
Live like the sardines to help the Buy to Let?