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Mr Yogi

What's Happening To Rents?

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The guy I work with is going through a divorce. They sold the family home a couple of years ago and his ex is renting a 3-bed semi in a reasonable area for £600pm for her and the two kids.

The other day she told him that she had found another house and that she was going to move. Bigger place, near the school, nice garden etc etc..... £800 pm. Fearing that he would be expected to contribute my mate poo-pooed the idea.

Upshot is that she went and offered £600 pm and they settled on £650! This is a nice house in a good suburban area, not a new build flat.

I was paying £600 pm for an equivelent house 16 years ago - at the low point in the housing market last time round.

Rents seem absurdly low in comparison to house prices, and getting lower! Or to put it another way, house prices are still absurdly high in comparison to rents.

Why would anyone buy at the moment?

Edited by Mr Yogi

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In rural Wales rents seem to be much more expensive than they were a few years ago - directly related to the HPI.

We've never had that much rental stock anyway and it was formerly houses that had been rented out for years so mortgages were paid off or very low. Then suddenly HPI and BTL took off and rents went up accordingly.

Now there is a lot of rental stock that is houses that people can't sell and are renting out. Looking in the paper they don't seem that cheap, but I think that is because they are mostly very nice houses, rather than the usual slightly shabby rentals. Seem to take longer to find tenants though (I see the same houses advertised for several weeks rather than being snapped up the day they've gone in the paper as used to be the case).

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The guy I work with is going through a divorce. They sold the family home a couple of years ago and his ex is renting a 3-bed semi in a reasonable area for £600pm for her and the two kids.

The other day she told him that she had found another house and that she was going to move. Bigger place, near the school, nice garden etc etc..... £800 pm. Fearing that he would be expected to contribute my mate poo-pooed the idea.

Upshot is that she went and offered £600 pm and they settled on £650! This is a nice house in a good suburban area, not a new build flat.

I was paying £600 pm for an equivelent house 16 years ago - at the low point in the housing market last time round.

Rents seem absurdly low in comparison to house prices, and getting lower! Or to put it another way, house prices are still absurdly high in comparison to rents.

Why would anyone buy at the moment?

Agreed. I am in London commuter belt, and rates are ridiculously low.

I move at the end of next week to a place that was bought for just under £1m last summer, my monthly rent is well sub-£2k per month. LL thus getting a return of sub 2.5% pa, before taking any of his costs into account. Fortunately he is stinking rich, and is only letting the house because he is being seconded overseas.

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Agreed. I am in London commuter belt, and rates are ridiculously low.

I move at the end of next week to a place that was bought for just under £1m last summer, my monthly rent is well sub-£2k per month. LL thus getting a return of sub 2.5% pa, before taking any of his costs into account. Fortunately he is stinking rich, and is only letting the house because he is being seconded overseas.

Hi LHO,

I'm in central London and have seen rents fall around 25% over the last 18 months. You do seem to have found a good deal. What area are you in? and did you deal direct with the LL or through a Estate agent?

Cheers

Bankside

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Hi LHO,

I'm in central London and have seen rents fall around 25% over the last 18 months. You do seem to have found a good deal. What area are you in? and did you deal direct with the LL or through a Estate agent?

Cheers

Bankside

Hi Bankside,

Am in Essex for my sins, and went through an EA.

Need a big house. Last time I moved, it was a case of waiting for a house that size to come up, in the area that we wanted, and then pay asking price. This time around we really have been spoiled for choice. Have signed up for two years, it really can't stay this way forever.

My thinking is that, as accidental landlords realise that they are not getting the returns they wanted on these houses, they will have to sell them. This additional supply will have a downward effect on prices.

Edited by Lee Harvey Oswald

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Rents locally ('oop North) were rising rapidly up until the middle of last year; since then they seem to have dropped 10% or so, but are still way too high compared to what you could get 10 years ago - they have risen by many multiples of inflation over this period.

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Negotiated a reduction of rent with the landlady 4 months back. She reduced it by £100. I asked for more, but was happy with reduction. BTW I am in Bath.

Edited by d2thdr

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In my experience there is a rent price crash across London. I am now renting a house worth £500 k for £800 a month. Admittedly this is an off market deal but the house was previously rented at 3 times the current rent. Looking at estate agents windows in West London the prices seem to be about 25% off what they were at the height of the boom, 2 years ago. Im not sure if this is a reflection of the deals that are actually being done though. Its certainly getting more competitive, thats for sure.

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