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VacantPossession

Writing On The Wall For Rents

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I've been tracking rents regularly for six months and in the UK it is an entirely different picture from the US picture identified in today's blog about US rents.

In selected places in the South East you can now rent a brand new 1 or 2 bed conversion flat with agreeable, neutral decor and even nice views for a substantial discount compared with 6 months ago, even compared with three months ago....as long as you avoid the usual "close to station", "inner-town/city" locations.

In fact, in the whole of rural england, and many urban areas hugely more pleasant than Greater London, you can pick up a luxury place for under £750, a pleasant flat or apartment for £650 and a bargain budget place for as low as £400 per month. These are offer prices and I would assume you can beat them down further if you present immaculate references.

What we are seeing here is rents falling back to traditional values. No longer is an instant profit or so-called "yield" implied.

The only thing that might be a concern for prospective tenants is that many of the properties are clearly last ditch attempts to recover some cashback in a flooded market, indicating that the BTL landlords are in dire trouble. (Always seek info about the landlord's ability to keep up his or her mortgage before you sign a lease).

I was wrong in previously predicting that lower buying prices would lead to reduced rents. It is the other way round; the rent reductions are coming first and are leading the sales market. In retrospect this is now obvious. A struggling BTL'er will first reduce rent and bide time, hoping the market will recover. It won't.

Expect further freefall in rents, but avoid crapola inner city dumps. If you can rent in a rural area you get your cake and eat it: pleasant dwellings at a price you can afford.

House prices must now dip lower still to match and accomodate the rental deflation. If you can rent the same kind of dwelling for half the price of buying one you are even less likely to buy than you ever were.

VP

Edited by VacantPossession

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Rents falling by 23% in two years in Fort Wayne Indiana.

Complex costs rise, but tenants pay less as price wars ensue
The intense competition for tenants is forcing many northeast Indiana apartment complexes to reduce rental rates below the rate of inflation, although the cost of running a complex is rising.
Some complexes have reduced starting rental rates up to 23 percent in the past two years
.

Fort Wayne

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Expect further freefall in rents, but avoid crapola inner city dumps. If you can rent in a rural area you get your cake and eat it: pleasant dwellings at a price you can afford.

The cheap prices you mention in the rural areas are not so cheap if you are paid a typical 'rural' wage of say £12K pa.

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Not a very useful post in all honesty.

Rents fell markedly about 2 years ago, especially in London. Since then they have been fragile but ok for those who have been in the market for 4+ years. This is no big revelation, its common knowledge.

As for avoiding close to town/transport. What planet are you on? Unless you are retired/a sponger/ work from home it doesn't make much sense as you spend precious time and money travelling to work.

No BTLer who has a ounce of sense will have bought away from transport/town centre/University/ etc etc. If they have tough for them and its rubbish stock anyway.

Another less than useful HPC thread

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Burlington Vermont

On Burlington's Loomis Street, a popular student housing area at the edge of the UVM campus, a for-rent sign

advertised in bold black letters: "One Month Free Rent."

For landlords things haven't been as favorable.

Mike Spillane figured now was time to get out of the business.

Last year Mike Spillane was forced to drop rent to fill his five-unit house in Burlington. Spillane, who is a real estate appraiser, sold his rental house in April, ending 16 years in the business.

Smart guy

Burlington Vermont

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Guest Charlie The Tramp
What we are seeing here is rents falling back to traditional values. No longer is an instant profit or so-called "yield" implied.

Normal market prices in the private sector used to be a little more than LA rents.

Today 1 bed flat LA £260 per month, BTL in same block ex LA £550 per month.

The cheap prices you mention in the rural areas are not so cheap if you are paid a typical 'rural' wage of say £12K pa.

Therefore rural people who cannot afford the price means those prices will have to eventually come down, or the owner is forced to sell if he can only return half his mortgage repayment.

As for avoiding close to town/transport. What planet are you on? Unless you are retired/a sponger/ work from home it doesn't make much sense as you spend precious time and money travelling to work.

You would be surprised how many people have to spend precious money and time travelling to work. One road alone the A12 from Gallows Corner, Romford to Ipswich is one constant unbroken flow during morning rush hour and again in the evening.

Edited by Charlie The Tramp

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BTL accounts for only 14% of the entire housing stock.

The long term average needed for rented property is about 8-10% of total (higher in London)

People need to direct their hysteria elsewhere.

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Not a very useful post in all honesty.

Rents fell markedly about 2 years ago, especially in London. Since then they have been fragile but ok for those who have been in the market for 4+ years. This is no big revelation, its common knowledge.

As for avoiding close to town/transport. What planet are you on? Unless you are retired/a sponger/ work from home it doesn't make much sense as you spend precious time and money travelling to work.

No BTLer who has a ounce of sense will have bought away from transport/town centre/University/ etc etc. If they have tough for them and its rubbish stock anyway.

Another less than useful HPC thread

Would have been a fair comment, if even half your comments were halfway correct.

1). A great number of BTL's are not in key urban areas.

2). A great many people DO work from home or in a place NOT always connected with urban sprawl. A growing proportion of the population work in areas that are not reliant on Buses, trains and tube.

3). BTL's bought and rented in places where there was formerly a reasonable demand, and not always in "obvious" places.

4). Rents did NOT fall markedly two years ago. They have risen. And in fact they increased slightly in 2004. It is only in the last few months that they have declined overall and declined a lot in certain areas.

5) The thread addressed "rents", not just BTL rents.

6) My comments were not for the use of those "investors" who have, as you say, been in the market for 4+ years. They were good news for tenants and FTB, which no doubt (as I assume you are a landlord), you will not welcome.

So your reply was not a useful post (in all honesty) either. Do you have anything useful to offer yourself, apart from rubbishing another post which is more accurate than your reply to it? Have a nice day.

VP

PS Please declare your landlord status. Thanks so much!! :D

Edited by VacantPossession

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BTL accounts for only 14% of the entire housing stock.

The long term average needed for rented property is about 8-10% of total (higher in London)

People need to direct their hysteria elsewhere.

But the thread title did not highlight BTL rents....it addressed rental property in general, and the prices I report are self evident. What is "hysterical" about that? Log on to Rightmove etc and see for yourself. I concede I mentioned BTL in the context of my comments. But the thread was about rents in general.

What is your own vested interest?

VP

Edited by VacantPossession

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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