Rents During The Last Crash...

[bandylegs]

Apologies if this has been done before but; what happened to rents during the last crash?

Did they rise as people stopped buying and created extra demand?

Did they fall because too many first time buyer properies had been created on the back of the boom creating excess supply?

Did they stay roughly the same because rents are 'sticky'?

Did something else happen?

Edited to ask wether something else happened...

Edited November 11, 2005 by bandylegs

[ILikeBigBoobs]

I used to increase mine at the rate of inflation .

I think the market was quite different then anyway (far fewer rentals available 12 years ago, or there certainly were in my area)

[CrashIsUnderWay]

In London, they fell. They didnt pick up till about 95. you could rent a 2 bed flat in Shep Bush for about £100 a week.

By 97 that had gone up to about 125.

[Time to raise the rents.]

In London, they fell. They didnt pick up till about 95. you could rent a 2 bed flat in Shep Bush for about £100 a week.

By 97 that had gone up to about 125.

Troll.

I rented a room with my wife (who was my girlfriend at the time) in a very dingy flat with no lounge for £160pw in 92 & 93. We had to share the 2 bed flat with 4 other people to get our share at that price. There was nothing even remotely close to what you've said.

[schadenfreude]

As far as I can remeber they didn't do anything dramatic. Supply was still fairly tight. I rented in Hampstead 91-93 and payed £800 pcm for the two one bed, OK but not fantastic flats I rented (btw I once opened the landlady's mortgage statement and she was paying £50 pm). I'm not sure what the rent is now for similar flats and how they compare on an inflation adjusted basis. At the time you could have bought the same for £120k - this seemed expensive at the time

[IPOD]

http://www.jrf.org.uk/knowledge/findings/housing/H194.asp

[London Landlady]

in 1996 I charged 900pcm for one flat. It is now 1200pcm. Flat rental increase over the past 2/3 years but good capital growth.

[Time to raise the rents.]

http://www.jrf.org.uk/knowledge/findings/housing/H194.asp

A very interesting find. But I hasten to say that in 1996 there were still a large number of sitting tenants on rediculously low rents that were reported to rent officers. Whilst simultaneously there were private short term rents that weren't reported. So I believe these figures are skewed downwards big time.

The best comparison would be of short term rentals then versus AST's today.

[London-loser]

Hmm,

According to that report rental yields in London at the end of Q1 1996 were about 10%.

TTRTR seems to think this significantly understates what "true and fair" rental yields actually were back then - should they be 12%, 15% or what?

But the Bank of England base rate was just 6%.

So back then the yield premium of rents over the base rate was 4% if you take their numbers, maybe 6%, 8% or more if you prefer TTRTR's vision (once you strip out the unfair effects of sitting tenants etc).

Today the base rate is 4.5% and I believe the average yield in London is below 6% (TTRTR tells us 6.5% is a very good yield).

So the "fair" rental premium over the base rate then was maybe 6% and today it is less than 1.5%.

I realise things are different now but has the yield premium required on London property REALLY collapsed to that extent?

Or could we just have bubble prices at present?

[Levy process]

Troll.

I rented a room with my wife (who was my girlfriend at the time) in a very dingy flat with no lounge for £160pw in 92 & 93. We had to share the 2 bed flat with 4 other people to get our share at that price. There was nothing even remotely close to what you've said.

Once you've looked up meritocracy in the dictionary, next find out what Troll means.

[malco]

In London, they fell. They didnt pick up till about 95. you could rent a 2 bed flat in Shep Bush for about £100 a week.

By 97 that had gone up to about 125.

No you couldn't. I looked high and low in London for decent accommodation during 1990-93. I never found an acceptable room for less than £75/wk plus bills and council tax. In all the flats I stayed in the landlord was raising the rents at about inflation rate or a bit faster. But all these landlords had owned for years so for them the boom-bust was "background", obviously not having a great impact on their supply and demand (otherwise rents would have gone up fast or gone down fast).

[CrashIsUnderWay]

yes you could. I've still got the old rent books stashed away in a storage chest.

I remember upgrading in 1995 to a swish 2 bed with lounge & balcony just off s.bush rd (facing the big white building). It looked for crap outside (concrete, estate agent on ground floor) but HUGE amounts of space for £150 a week.

Me & the gf moved in, and repainted the whole thing in swedish colors for fun. A year later the drunken irish landlord (funny how these parasites all have massive character deficiencies - I guess its all part of not wanting to work for a living) tried to bill us for the 'damage' but the agent a Mr Maglo the estate agent below, in fact) sided with us and pointed out we'd actually done him a favor, so we got our deposit back (last time I've EVER risked the dep - i.e. not said it was in lieu of the last months rent - recommend u all do the same.)

I also remember that the central heating system looked like it had been put together by a mad scientist, and that dripping water from the flat upstairs had started to rust the joists of the metal handrail on the balcony (which looked out over a small garage just off the bush).

As I recall, we moved to a 2 bed LA flat off portobello rd in Nottng hill *for exactly the same rent* after that.

And I also remember I paid £30 a week for a half share in a 2 bed flat above goldhawk wines in the goldhawk rd. Maybe not a nice flat particularly, but cheap, large, and quiet.

Methinks those of you who 'had no lounge' didnt look hard enough, or were suckered by unscrupulpous parasite landlords who saw you coming.

Edit - forgot to mention - TTRTR is a TROLL

Edited November 11, 2005 by CrashIsUnderWay

[King of the castle]

yes you could. I've still got the old rent books stashed away in a storage chest.

I remember upgrading in 1995 to a swish 2 bed with lounge & balcony just off s.bush rd (facing the big white building). It looked for crap outside (concrete, estate agent on ground floor) but HUGE amounts of space for £150 a week.

Renting for a decade, well I never! Did you never think of using some of your £100k a week currency gains to buy somewhere? Oh and if you're such a clever so and so why didn't you buy somewhere back in 96,97,98,99,00? At least we can see why you're such a bitter and twisted being, who wouldn't be having to pay 200% more for a property today compared to 95,96.

Couldn't have happened to a nastier guy!

KOTC

[Michael]

Troll.

I rented a room with my wife (who was my girlfriend at the time) in a very dingy flat with no lounge for £160pw in 92 & 93. We had to share the 2 bed flat with 4 other people to get our share at that price. There was nothing even remotely close to what you've said.

was the flat in mayfair?

[since the beginning]

Troll.

I rented a room with my wife (who was my girlfriend at the time) in a very dingy flat with no lounge for £160pw in 92 & 93. We had to share the 2 bed flat with 4 other people to get our share at that price. There was nothing even remotely close to what you've said.

What so there was you and your girlfriend in one room and four people sharing the other room and for that each paid 80pw?

[The Masked Tulip]

I'm not sure what the rent is now for similar flats and how they compare on an inflation adjusted basis. At the time you could have bought the same for £120k - this seemed expensive at the time

I remember looking at some houses back in 2001 - yes, 2001 - and thinking that they were expensive at 180K, 200K and 250K. Those same houses are on the market now for about half a mill each and, oddly but interestingly, I look at houses now for about 250K to 300K and I think that the prices are not that bad... but, of course, I know that they are really simply ludicrous prices... if you see what I mean?

[geranium]

No you couldn't. I looked high and low in London for decent accommodation during 1990-93. I never found an acceptable room for less than £75/wk plus bills and council tax. In all the flats I stayed in the landlord was raising the rents at about inflation rate or a bit faster. But all these landlords had owned for years so for them the boom-bust was "background", obviously not having a great impact on their supply and demand (otherwise rents would have gone up fast or gone down fast).

I'd agree with this. I was renting in the Shepherds Bush area in 1993-4. A small room with no living-room was £70 per week all-in, a large room in a flat with a living room was £100+.

£160 per week for only a room in a flat with no living-room definitely sounds too high, unless it really was in Knightsbridge.

Rent seemed very expensive in London and rental accommodation at that time was in shorter supply, but I don't remember much inflation through the early/mid 90's.