Jump to content
House Price Crash Forum
Sign in to follow this  
MarkyB

Will Ir Raise's Impact Rental Charges On Properties?

Recommended Posts

Do we all agree, interest rates will be rising?

now, if rates are rising, will rent on properties also increase?... or will this be a slow process? Obviously BTL'rs have fixed rate mortgages, and tenants have fixed rents for fixed periods! What do you think?

interest rates increase, increasing mortgage replayments. ie, not a good time to buy? unless prices come down. Then surely having the same effect for making house prices cheaper?, I think, as reducing rates made homes more affordable, so the opposite will happen if the reverse happens when rates increase.

So, its a good time to rent then at the moment? Yes?

My plan is to buy when interest rates have risen, which should bring down the cost of buying a new house. then hopefully, I will be in a worse case scenario, will have borrowed less, and will have less capital to repay!... Knowing still that I can afford it!

Share this post


Link to post
Share on other sites

Do we all agree, interest rates will be rising?

now, if rates are rising, will rent on properties also increase?... or will this be a slow process? Obviously BTL'rs have fixed rate mortgages, and tenants have fixed rents for fixed periods! What do you think?

interest rates increase, increasing mortgage replayments. ie, not a good time to buy? unless prices come down. Then surely having the same effect for making house prices cheaper?, I think, as reducing rates made homes more affordable, so the opposite will happen if the reverse happens when rates increase.

So, its a good time to rent then at the moment? Yes?

My plan is to buy when interest rates have risen, which should bring down the cost of buying a new house. then hopefully, I will be in a worse case scenario, will have borrowed less, and will have less capital to repay!... Knowing still that I can afford it!

Personally I would say that despite the fact that landlords should end up competing for tenants and competitively dropping their rents, I think you need to remember that a lot of new landlords are amateurs who haven't looked at renting as a business but as a cash machine.

Consequently I think that just as some sellers that can't find a buyer have been putting their prices up after a period of time we may see the same ridiculous behaviour amongst landlords who cannot find tenants.

I also think that a number of us tenants will be forced to move because the landlord insists on raising the rent to ridiculous levels because he needs the money to cover the increased mortgage repayments.

I don't think it will occur to the amateur landlords who have had things pretty easy up until now to keep their rents at a level that avoids long vacancy periods.

As for whether renting is a good idea at the moment, this subject has been covered many times especially in the 'You're renting. Tell us how you feel about it thread'.

As for buying when interest rates rise, does that mean you want to buy as soon as there is a single rate rise or that you want to buy when you feel that interest rates have peaked?

Share this post


Link to post
Share on other sites

Personally I would say that despite the fact that landlords should end up competing for tenants and competitively dropping their rents, I think you need to remember that a lot of new landlords are amateurs who haven't looked at renting as a business but as a cash machine.

Consequently I think that just as some sellers that can't find a buyer have been putting their prices up after a period of time we may see the same ridiculous behaviour amongst landlords who cannot find tenants.

I also think that a number of us tenants will be forced to move because the landlord insists on raising the rent to ridiculous levels because he needs the money to cover the increased mortgage repayments.

I don't think it will occur to the amateur landlords who have had things pretty easy up until now to keep their rents at a level that avoids long vacancy periods.

As for whether renting is a good idea at the moment, this subject has been covered many times especially in the 'You're renting. Tell us how you feel about it thread'.

As for buying when interest rates rise, does that mean you want to buy as soon as there is a single rate rise or that you want to buy when you feel that interest rates have peaked?

when interest rates have peaked!! (hopefully, peaked), and house prices have reflected this...

where the peak will be, I dont know... but, i hope you see my idea, im sure alot of people think along similar lines!

Share this post


Link to post
Share on other sites

believe me, its not the 'landlords' that control rents.

its market forces and wages.

they would love to control rents.

but if they did they would already be twice what they are.

if IRs shoot up, thats their problem.

do you think people who already are not taking up rentals will suddenly decide that at an even larger price, its a good time to rent and help out a striggling landlord.

sod em'

let them die.

Share this post


Link to post
Share on other sites

believe me, its not the 'landlords' that control rents.

its market forces and wages.

they would love to control rents.

but if they did they would already be twice what they are.

if IRs shoot up, thats their problem.

do you think people who already are not taking up rentals will suddenly decide that at an even larger price, its a good time to rent and help out a striggling landlord.

sod em'

let them die.

I am not suggesting that people would accept rents at a higher price, simply that individual landlords won't necessarily behave rationally and yes, this may well mean that their BTL business will likely 'die' pretty fast.

Share this post


Link to post
Share on other sites

Landlords can try to raise rents but I don't think they'll have much success, least of all here in Norwich. There is simply too much competition.

I recall last March (the last time I was hunting for a place to live) getting Tuesday's EDP and perusing through the four or five pages that comprised the rental property section. Now it's a 12 page pullout! And if one looks at various agent's websites it's clear that those listed in the pullout still form only a tiny percentage of all properties on the their books.

Newbie landlords who bought new-builds like they were penny chews are being badly hit at the minute. The long-standing landlords are simply undercutting them left, right and centre, and still making a killing in the process! Said landlords also hold more desireable houses which are older, part-furnished and have decent sized rooms - perfect for house-sharing which forms a huge proportion of the rental market here (certainly more than half when one includes the student population). New-build, on the other hand, has proved a massive turn-off for house-sharers because in order to cram as many properties onto one development as possible every room is really small (10' x 8.5'... and the double bed goes where exactly?). So what about the rest of the market? Students? No chance. Many cannot afford to live anyway, never mind paying huge amounts of rent. Families? Well, I would argue that faced with £900pcm+ for an unfurnished place you can't do jack to, they may as well bite the bullet and get a mortgage! [1]

So would a rise in interest rates force rents up? For long-standing landlords, I would say this was unlikely, at least in the short-term. Forcing the rent up during a tenancy runs the risk (and hassle) of losing an existing tenant. If one is sensibly geared it would be far easier to raise the rent between tenancies and see if anyone bites. For newbie landlords with a high LTV, however, they may have no option but to try and pass on the rise onto tenants straight away, but they will be in for a rude awakening when they find the tenant holds all the cards and can negotiate rents the other way!

Just my 2p.

Cheston.

[1] The malaise being suffered by the newbie landlord now regularly shows up in the 72-80 page (count 'em) property sections in the EDP (not to mention Rightmove) as many try to quit the market. There's so much stuff listed from 12 month old developments or described as "as new" it's laughable. Builders are appealing once again to owner-occupiers with "move in for £600" offers, or "5% deposit + stamp duty paid, free carpets and appliances" - anything to get people buying again! The investors just don't want to know any more.

Share this post


Link to post
Share on other sites

some folks are born to wave the housing flag.

man there all red white and blue.

but when the IR plays hell for the BoE.

they'll point the cannon right at you.

it aint me. it aint me.

im no senators son.

it aint me, it aint me,

im no fortunate son.

some people are born, silver spoon in mouth.

lord dont they help themselves dog.

but when the tax man calls at the door.

the house is like a rumage sale.

whoopey doo.

it aint me. it aint me.

im no senators son.

it aint me, it aint me,

im no fortunate son.

some on here, have star spankled eyes,

they will send us to iran for war.

and if you ask them how much shall we give.

the answer is always more more more. yeah.

it aint me. it aint me.

im no senators son.

it aint me, it aint me,

im no fortunate son.

Edited by right_freds_dead

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.