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cashinmattress

Landlords To See Further Rental Value Fall

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Landlords to see further rental value fall

Residential landlords are to see further falls in rental values collected on their properties, with the highest balance of surveyors on record reporting declines.

The sharp fall, caused by an oversupply of buy-to-let and other rental property, is expected to moderate slightly, however, according to a survey by the Royal Institution of Chartered Surveyors due out next week.

The net balance of chartered surveyors reporting falls rather than rises in rents rose from 48 per cent to 55 per cent in the three months to April, the highest level in the 10-year history of the lettings survey.

In London, the rental market for houses continues to favour tenants, with a net 85 per cent of surveyors reporting a fall rather than a rise in rents, from 71 per cent three months previously.

The change has been most marked in Scotland, where a net 80 per cent of surveyors reported a fall rather than a rise, up from 58 per cent previously.

Jeremy Leaf, at Rics, said: “Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals. Even so, the downward pressure on rents should ease in the coming months, providing some good news for landlords.â€

Significantly, said Rics, surveyors report that gross property yields – an indication of the income generated from property – are falling for the first time since April 2007, suggesting that rents are declining at a more rapid pace than house prices.

The picture looks a little more encouraging for landlords as rental expectations, although still negative, have improved markedly. The net balance of surveyors anticipating future rental declines fell to 25 per cent, from 41 per cent.

There is also a reported increase in the willingness of landlords to consider selling their property at the expiry of a tenant lease. There is good news for landlords that tenant demand for rental property continued to increase, albeit at a slower pace, with a net balance of 16 per cent more surveyors reporting a rise rather than a fall in new tenant lettings, down from 42 per cent.

More surveyors are reporting an increase in supply, however, given that instructions to let both flats and houses are still rising.

In spite of signs of falling rents, the buy-to-let landlords’ association will say on Saturday that landlords have been buying up more properties in the past quarter than in the previous three months.

The Association of Residential Letting Agents said nearly twice as many members reported that landlords were buying more properties, driven by cuts in interest rates.

Money. Hole. Throw it in. BTL. Money. Fire. Throw it in. BTL

Simple. You can do better with a cash account, or your mattress.

"Buying is dead money."

"It's a renters market."

Edited by cashinmattress

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Landlords to see further rental value fall

There is also a reported increase in the willingness of landlords to consider selling their property at the expiry of a tenant lease. There is good news for landlords that tenant demand for rental property continued to increase, albeit at a slower pace, with a net balance of 16 per cent more surveyors reporting a rise rather than a fall in new tenant lettings, down from 42 per cent.

This is the end game kicking in. Same happened in Ireland a year or so ago.

First House prices started falling.

So people started renting their houses out.

Then rents started falling.

So people were forced into selling.

The vicious circle is now complete, as the general oversupply of newbuild has saturated both the sales and rental markets, undercutting existing sellers and landlords.

Rents and house prices now to go down rapidly together as landlords go bankrupt and their stock is auctioned back into the housing / rental markets.

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This is the end game kicking in. Same happened in Ireland a year or so ago.

First House prices started falling.

So people started renting their houses out.

Then rents started falling.

So people were forced into selling.

The vicious circle is now complete, as the general oversupply of newbuild has saturated both the sales and rental markets, undercutting existing sellers and landlords.

Rents and house prices now to go down rapidly together as landlords go bankrupt and their stock is auctioned back into the housing / rental markets.

There is simply not enough liquid cash in the system to support the status quo ca 2007. There will have to be a huge revision in Britain in order to survive, as we simply cannot continue on the same path.

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Landlords to see further rental value fall

Money. Hole. Throw it in. BTL. Money. Fire. Throw it in. BTL

Simple. You can do better with a cash account, or your mattress.

"Buying is dead money."

"It's a renters market."

I'm glad.

Rents seem to have risen steadily for too long.

This will cut tenants some much needed slack.

Have to say i don't see any downward pressure here.

'course, I am assuming the report is accurate. No one believes the RICS when they report rises in HP's or rents.

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There is simply not enough liquid cash in the system to support the status quo ca 2007. There will have to be a huge revision in Britain in order to survive, as we simply cannot continue on the same path.

I take it you aren't anticipating high inflation.

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This is the end game kicking in. Same happened in Ireland a year or so ago.

First House prices started falling.

So people started renting their houses out.

Then rents started falling.

So people were forced into selling.

The vicious circle is now complete, as the general oversupply of newbuild has saturated both the sales and rental markets, undercutting existing sellers and landlords.

Rents and house prices now to go down rapidly together as landlords go bankrupt and their stock is auctioned back into the housing / rental markets.

Add in the recent news that "investment landlords" are "snapping up" homes to take advantage of low interest rates and you can expect to see even more going to the wall when that rate starts to rise...

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Wages are falling and have been since early '08, and the cost of virtually all essential goods and services other than housing is rising. You can't negotiate with the petrol station over the price of a litre of unleaded. But you can negotiate with a LL as to how much rent you're going to pay. Of course rents are falling, and the supply of properties in the market isn't the only reason.

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