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With all the good news flowing around the MSM recently I decided to be a contrarian and downsize for my next 12 months rental contract.

I am in a nicely done up 2 Bed around 80-90 sq Meters but decided it was a complete waste of money as the second room was basically a storage area for my bicycle.

Looking around SW London I noticed that asking prices did not seem that much different to August 2008, however when I performed search criteria for SW15 , I was coming up with 400+ properties that were within 1 mile of my post code and available in the next few weeks.

I spoke to 5 of the 12 Letting Agents that sit on the real estate mile as it must be known in Putney. (no shops only real estate agents)

Whenever I went to see a place the agents were making it clear that prices were negotiable.

Of the many places I viewed, I liked a good size one bed (maybe 60 sq meters) about 500 meters from Putney High Street, this was snapped up by one savvy renter on the same day for 1150 (asking price 1200) per month.

Two days later another agent had an identical apartment in the same complex asking 1100 Per month, I agreed on 1000 per month.

I am sure others among you would have negotiated a harder bargain.....but I have better things to do and have managed to reduce my annual rental outgoings by almost GBP 5,000 so I am a happy camper for now.

Good news for all the HPC'ers....these rental falls will eventually feed into the yield calculations that are being made....and pennies will eventually drop.

Until that day, I remain content to rent.

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With all the good news flowing around the MSM recently I decided to be a contrarian and downsize for my next 12 months rental contract.

*snip*

Good news for all the HPC'ers....these rental falls will eventually feed into the yield calculations that are being made....and pennies will eventually drop.

Until that day, I remain content to rent.

I'm glad to hear this as I havent looked for a while, it doesnt surprise me all that much.

Considering Putney is very popular Aust/Kiwi's many of whom will have lost their work as contracts expired, or are returning home when their time is up and not being replaced as those that planned to come over this year have surely had 2nd thoughts as they realise the work isnt available.

Its also a popular area for young prof who are more likely to do things like move back with parents should their employment fall through, or consolidating into larger households as their flatmates may lose theirs.

We saw great opportunities to put in rent offers in SW6 during April 09 - we cut about 20% off the asking price in the end.

Is putney very popular with the Just-Let-It-Out brigade who would have normally sold do you think?

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How much does a 1 bed flat cost in Putney?

To buy or rent

lets say a 20s or 30s year old decides to rent all their life at 1kpm thats 480k unadjusted for inflation total loss in 40 years thats some loss

I will guess this flat will be around 200k and around 1 to 2k service charge and thats a killer if you own but still if a total loss is made on the flat buying over the long term is less of a loss and any final resale is just more profit each method will be a loss but in housing profit is the smallest lost

I dont say buy now but buying longterm should reduce housing losses

I would assume in 40 years rents will be several thousands per month and this property will be more than a million but still buying is financial common sence longterm for me

this is a contrarian move but lets say a fixed interest rate of 5% can be had and you purchased this flat today the rent to buy would be the same would be a silly move yes its possible the same flat in 2 years from now may be worth 150k a 50k loss not nice but ignore this think long term in a few decades you will probably be 50k todays money better off probably more its worth thinking about will it be less or more in two years i dont know but the maths above i do thats solid i think prices will be less in two years but i may be wrong thats why this is a contrarian bet and i cant see 5% fixed longter rates around in two years buying now could be a smart move if you beleive the country dosnt go bust

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I will guess this flat will be around 200k

erm try around 300-350k for a decent 1 bed in SW15 - tht changes your rent or buy calc a bit I imagine.

I've jsut negotiated a 9% reduction in my rent for a 1 bed in Putney. There is a lot of stock available in this area.

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erm try around 300-350k for a decent 1 bed in SW15 - tht changes your rent or buy calc a bit I imagine.

I've jsut negotiated a 9% reduction in my rent for a 1 bed in Putney. There is a lot of stock available in this area.

Agreed, at the moment the absolute minimum on anything decent near the central part of Putney is quoted as upwards of 290 k

Just did the search on rightmove for 175 k - 200 k to see if nobody 777 had a point. I am afraid only 17 properties come up in this price range and most of them are in the sort of concrete 15 - 20 story architectural nightmares that this site sometimes loves to parody. (I'm thinking of a certain over priced Sh*thole thread)

Waiting is the name of the game for now.

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erm try around 300-350k for a decent 1 bed in SW15 - tht changes your rent or buy calc a bit I imagine.

I've jsut negotiated a 9% reduction in my rent for a 1 bed in Putney. There is a lot of stock available in this area.

Not saying you are wrong but is a 300-350k flat really renting for 1,000 a month?

That's between 3.4 and 4% yield which is pretty appalling even for this market.

I think this flat costs less than that, sorry.

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Not saying you are wrong but is a 300-350k flat really renting for 1,000 a month?

That's between 3.4 and 4% yield which is pretty appalling even for this market.

I think this flat costs less than that, sorry.

For my flat (not the OP) its a 2bed in SW6 that cost 585k peak '07 now worth around 500k by zoopla - currently renting at just shy of 2k per month. What's the calculation for yield?

I'm certainly not planning on renting my entire life, but I only aim to buy when the numbers stack up. My own situation is simple - I cannot buy what I want in London in these prices so I rent until either I can afford/I think the crash is over, or I reach the stage when I dont want to live in London.

The flat I'm living in should be worth, if I try to take a sensible view on it, about £350k IMHO - welcome to the crazy history of UK HPI.

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assuming a flat in Putney is worth £300k to £350 producing a maximum gross yield of 12k thats only about 3.5% minus any running costs the service charge if any insurance and genreal maintence and offcourse letting agent fees if used and if unlet running costs liabilities council tax etc will for me these valuations remind me of .com proportions maybe a 6k net profit forget tax as 5% interest on this figure will be 15 to 17.5k so how long will landlords lose 10K pa?

You are a very very wise person renting at 1kpm the bubble is a lot bigger than I thaught in London

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My flat in Brook Green borders costs £1150 a month to rent. I pay the same as the guy who lives across the hall in an identical flat. His flat is currently under offer at £325k (asking price was £345k). My landlord bought at £160k in 2002.

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Not saying you are wrong but is a 300-350k flat really renting for 1,000 a month?

That's between 3.4 and 4% yield which is pretty appalling even for this market.

I think this flat costs less than that, sorry.

no more like 1200 pcm

and at 350K = gross yield of 4.11% then you have service charges and maintenance.

Yes it is that appalling for investors - hence the reason that I STR'd I'll buy to live when the yield approaches 8-9% (as this accounts for rent rises and price falls)

"investors" in this market clearly didn't/haven't got a clue - their loss is my gain.

The valuations of SW London property are massivelydislocated from rental costs and have been for some time - its a no brainer to rent right now and for the forseeable future

Edited by Jin

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I moved to a 1 bedroom in Putney 4 months ago. Managed to get 10% off the asking rental price and told the estate agents I would not pay tenancy fees. The flat is quite nice and has a garden and my research suggests it would be advertised on Rightmove for at least £300,000. The rental yields are terrible in this area. There is really no reason to buy yet.

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assuming a flat in Putney is worth £300k to £350 producing a maximum gross yield of 12k thats only about 3.5% minus any running costs the service charge if any insurance and genreal maintence and offcourse letting agent fees if used and if unlet running costs liabilities council tax etc will for me these valuations remind me of .com proportions maybe a 6k net profit forget tax as 5% interest on this figure will be 15 to 17.5k so how long will landlords lose 10K pa?

You are a very very wise person renting at 1kpm the bubble is a lot bigger than I thaught in London

To be fair I don't know what the market value of this place is. None of the flats in the block are currently for sale so I dont have a reference point. It could be in the 250k + range. This would make the yield SEEM a little better than your calculations.

But, and there is always a but, this Landlord has a one month void this year, repainting and carpeting costs in a few rooms and will have storage costs for the furniture I dont want.

This is the sort of property that I am happy to rent for 12 months, but would not dream of buying. I will have a look and see how the market is once the 6 months break clause kicks in.

As for being a very very wise person............it could be pointed out that I could have bought about 10 Bicycles for the amount of rent I was paying for the storage of my rusty mountain bike over the last year.

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no more like 1200 pcm

It sounds like with such oversupply the rents are still being driven down and yields getting even worse, even during this temporary seasonal levelling of the HPC. Surely the OP getting rent at 1000pcm on a 300-320k flat IS the market value right here and now.

Many landlords are getting badly burnt if they're new to the game and didnt do the maths.

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It sounds like with such oversupply the rents are still being driven down and yields getting even worse, even during this temporary seasonal levelling of the HPC. Surely the OP getting rent at 1000pcm on a 300-320k flat IS the market value right here and now.

Many landlords are getting badly burnt if they're new to the game and didnt do the maths.

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Regarding paying a fortune for a second room to store a mountain bike etc everyone makes mistakes a wise man does something about them as you have

I would be writing a log time to list my mistakes but I am wise enough to admit them and act but I always make more thats life

My latest big play was to sell my decent two bed flat like you one room for storing things with parking in manchester for £136 minus costs and it cost me 156 in 2005 dosnt sound very wise

I sold because like you I dont need it I can rent a room for the annual running costs but I didnt fire sale it for no reason I have bet against the UK surviving as a first world status and bought international hard assets a high risk move and I hope my bet dosnt fully come off but if it does I should be able to buy a few flats in Putney down the road with the profits then again Putney wont be quite the same and if it dosnt well it will be a rollercoster one way or another

Time will tell if I am very very smart or a prize fool or lucky or unlucky

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