richc Posted October 13, 2013 Share Posted October 13, 2013 (edited) Maybe it's just me, but from looking at the rental market for family homes around London on RightMove, asking rents appear to be crashing. There appears to be a pattern of houses coming onto RightMove at prices that are generally lower than a year ago, sitting there for a couple of weeks, then having the price reduced by 10% or 20%. It seems like landlords are getting nervous. I saw this ad for a 4-bed house in Ascot this morning which struck me how out of synch prices and rents are becoming: http://www.rightmove.co.uk/property-to-rent/property-28315482.html They're asking £2500 a month (which I know is a lot of money), but considering that the house next door sold recently for £4.5 million, it seems like a bargain. The phenomenon of sub 3% gross yields appears to be spreading out from zone 1 London. Edited October 13, 2013 by richc Quote Link to comment Share on other sites More sharing options...
righttoleech Posted October 13, 2013 Share Posted October 13, 2013 Maybe it's just me, but from looking at the rental market for family homes around London on RightMove, asking rents appear to be crashing. There appears to be a pattern of houses coming onto RightMove at prices that are generally lower than a year ago, sitting there for a couple of weeks, then having the price reduced by 10% or 20%. It seems like landlords are getting nervous. I saw this ad for a 4-bed house in Ascot this morning which struck me how out of synch prices and rents are becoming: http://www.rightmove.co.uk/property-to-rent/property-28315482.html They're asking £2500 a month (which I know is a lot of money), but considering that the house next door sold recently for £4.5 million, it seems like a bargain. The phenomenon of sub 3% gross yields appears to be spreading out from zone 1 London. I fear an innumerate ignorant EA has omitted a zero from the price. Quote Link to comment Share on other sites More sharing options...
richc Posted October 13, 2013 Author Share Posted October 13, 2013 Anecdotal with some statistical evidence I would suggest. Averages hide a multitude of sins: http://www.housepricecrash.co.uk/forum/index.php?showtopic=193946 7.6% annual decline in rents in Hampstead. Some high-end BTLer's business plan just went out the window. Thanks for the link -- I hadn't seen your post. Rents went through the roof in central London in 2010/2011 and I really couldn't figure out who was renting these places. I knew friends in nicer neighbourhoods who were being forced out by 25% or 30% rental increase demands, but the number of people who could actually afford the new rents seemed infinitely small. Quote Link to comment Share on other sites More sharing options...
richc Posted October 13, 2013 Author Share Posted October 13, 2013 I fear an innumerate ignorant EA has omitted a zero from the price. I was looking at what had come onto the market in the past 24 hours when I saw that listing. There's a similar, though not exactly as nice house, on the other side of Ascot that showed up in the same search because it just had it's asking rent reduced to £2500 after sitting on the market since the beginning of August at £2700. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted October 13, 2013 Share Posted October 13, 2013 (edited) We are moving out of our current rental in Dulwich (large flat in a converted Victorian house) at the end of the month. The letting agents are asking for £100 a month more than we currently pay, presumably hoping for at least £50 more. So far in the three weekends the property has been up on Rightmove there have been two viewings in total, both last weekend. We were at home for both viewings. One couple said that they liked the flat but it was over their budget. The letting agent told them that somebody would take it at the asking price. The other couple said it was in poor condition and needed work to bring it up to standard (I fully agree with this assessment). The letting agent told them "the landlord feels that the condition is reflected in the price". Anyway, the greedy pricing and arrogant LA attitude mean that three weeks away from our leaving date we just had a weekend with no viewings and none are planned. The landlord may well be heading for a void. The London rental market seems much cooler than it was when we last moved at the end of 2010. Edited October 13, 2013 by Dorkins Quote Link to comment Share on other sites More sharing options...
lastlaugh Posted October 13, 2013 Share Posted October 13, 2013 Housing Benefit Cap! Explains everything. LLs can no longer set prices in the PRS. Quote Link to comment Share on other sites More sharing options...
righttoleech Posted October 13, 2013 Share Posted October 13, 2013 I think it was a landlordist jape (the hint might be in the name - righttoleech - gettit?). Don't get me wrong, I think BTL has wrecked this country in so many ways.......my username reflects my contempt for LLs. I hope the poster is correct about crashing rents....but seriously I cannot believe anyone would rent out a £4m property for a yield of <1%. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted October 13, 2013 Share Posted October 13, 2013 Don't get me wrong, I think BTL has wrecked this country in so many ways.......my username reflects my contempt for LLs. I hope the poster is correct about crashing rents....but seriously I cannot believe anyone would rent out a £4m property for a yield of <1%. Well if it is the house next door that sold recently, this may have been bought ages ago, and some money for an empty house is better than no money? There will be less people in the market for this type/price of house now that the bubble has burst? Quote Link to comment Share on other sites More sharing options...
Snugglybear Posted October 13, 2013 Share Posted October 13, 2013 Housing Benefit Cap! Explains everything. LLs can no longer set prices in the PRS. There are figures for the humber of households affected by the housing benefit cap in the four boroughs in London where it was trialled, on the housing.co.uk website, from August this year http://www.insidehousing.co.uk/tenancies/3000-families-affected-by-benefit-cap/6528063.article Average household size in London is under 3 persons per household, except Newham, where it is 3.01. Households affected by housing benefit cap Bromley - 185 (out of a population of 312,400, which at 3 people per household on average is 104,133 households) Croydon - 574 (out of a population of 345,600, so 115,200 households) Enfield - 1,385 (out of a population of 294,900, so 98,300 households) Haringey - 759 (out of a population of 225,000, so 75,000 households) So a total of 2,903 households affected, out of a total of 392,633 households, at an estimate. About 0.74%. I don't know that the cap has had much effect. Quote Link to comment Share on other sites More sharing options...
Goat Posted October 13, 2013 Share Posted October 13, 2013 So a total of 2,903 households affected, out of a total of 392,633 households, at an estimate. About 0.74%. I don't know that the cap has had much effect. I'm not sure. The cap went nationwide from April this year so for London and surrounding area you're probably looking at ITRO 4m households in total and assuming the same percentage affected about 30,000 properties no longer affordable to benefit claimants. Since the total number of people in London able to pay £1,500+ per month from their wages is not that huge an extra 30,000 properties on the market could be quite significant. One also wonders if the cap disproportionately affects the most expensive rental properties, i.e. a household with 4 children might be entitled to a 4 bed house costing £2,500+, there are very few people able to pay that out of their own income but anecdotally at least quite a lot of households who've been expecting the taxpayer to pay it for them. Quote Link to comment Share on other sites More sharing options...
stormymonday_2011 Posted October 13, 2013 Share Posted October 13, 2013 (edited) I'm not sure. The cap went nationwide from April this year so for London and surrounding area you're probably looking at ITRO 4m households in total and assuming the same percentage affected about 30,000 properties no longer affordable to benefit claimants. Since the total number of people in London able to pay £1,500+ per month from their wages is not that huge an extra 30,000 properties on the market could be quite significant. One also wonders if the cap disproportionately affects the most expensive rental properties, i.e. a household with 4 children might be entitled to a 4 bed house costing £2,500+, there are very few people able to pay that out of their own income but anecdotally at least quite a lot of households who've been expecting the taxpayer to pay it for them. Agreed Prices and rents are moved at the margin and that is precisely where the benefit cap will hit On edit - At the top end of the market I note that Abramovich has put his new £100 million home on ice but appears to be splashing out his cash on a pad in Manhattan Make of that what you will for a market signal http://www.dailymail.co.uk/news/article-2394042/Roman-Abramovich-puts-100-million-mega-home-ice--delight-neighbours-Chelsea.html http://ny.curbed.com/archives/2013/10/04/roman_abramovichs_75m_buy_would_shatter_coop_record.php Edited October 13, 2013 by stormymonday_2011 Quote Link to comment Share on other sites More sharing options...
Guest eight Posted October 13, 2013 Share Posted October 13, 2013 We are moving out of our current rental in Dulwich (large flat in a converted Victorian house) at the end of the month. The letting agents are asking for £100 a month more than we currently pay, presumably hoping for at least £50 more. So far in the three weekends the property has been up on Rightmove there have been two viewings in total, both last weekend. We were at home for both viewings. One couple said that they liked the flat but it was over their budget. The letting agent told them that somebody would take it at the asking price. The other couple said it was in poor condition and needed work to bring it up to standard (I fully agree with this assessment). The letting agent told them "the landlord feels that the condition is reflected in the price". Anyway, the greedy pricing and arrogant LA attitude mean that three weeks away from our leaving date we just had a weekend with no viewings and none are planned. The landlord may well be heading for a void. The London rental market seems much cooler than it was when we last moved at the end of 2010. Anybody (be it landlord or letting agent or some evil hybrid of both) who risks even one void in return for an extra £100/month is either desperate, or as thick as pigshit. Quote Link to comment Share on other sites More sharing options...
lastlaugh Posted October 13, 2013 Share Posted October 13, 2013 There are figures for the humber of households affected by the housing benefit cap in the four boroughs in London where it was trialled, on the housing.co.uk website, from August this year http://www.insidehousing.co.uk/tenancies/3000-families-affected-by-benefit-cap/6528063.article Average household size in London is under 3 persons per household, except Newham, where it is 3.01. Households affected by housing benefit cap Bromley - 185 (out of a population of 312,400, which at 3 people per household on average is 104,133 households) Croydon - 574 (out of a population of 345,600, so 115,200 households) Enfield - 1,385 (out of a population of 294,900, so 98,300 households) Haringey - 759 (out of a population of 225,000, so 75,000 households) So a total of 2,903 households affected, out of a total of 392,633 households, at an estimate. About 0.74%. I don't know that the cap has had much effect. I think you are confusing the Total Benefit Cap with the Housing Benefit Cap. They are 2 different things. The most recent figures I have are from 2011, and they show over 800,000 households claiming housing benefit in London that year. Housing benefit for the largest homes in central london has been reduced from £2000 per week to about £400pw. It is taking a while for the market to find a new level - but it's definitely happening. Quote Link to comment Share on other sites More sharing options...
PalmerEldritch Posted October 13, 2013 Share Posted October 13, 2013 Maybe it's just me, but from looking at the rental market for family homes around London on RightMove, asking rents appear to be crashing. There appears to be a pattern of houses coming onto RightMove at prices that are generally lower than a year ago, sitting there for a couple of weeks, then having the price reduced by 10% or 20%. It seems like landlords are getting nervous. I saw this ad for a 4-bed house in Ascot this morning which struck me how out of synch prices and rents are becoming: http://www.rightmove.co.uk/property-to-rent/property-28315482.html They're asking £2500 a month (which I know is a lot of money), but considering that the house next door sold recently for £4.5 million, it seems like a bargain. The phenomenon of sub 3% gross yields appears to be spreading out from zone 1 London. Rubbish. I wish it was true but don't see it. Flat above me went on for £450 p/w and was let in no time at all. Demand is still there and until rates rise from 0.5% there will be more landlords coming to market and making a killing. It's all about the rate of return and until Carney and his mates raise rates nothing will change. Quote Link to comment Share on other sites More sharing options...
gadget Posted October 13, 2013 Share Posted October 13, 2013 Housing Benefit Cap! Explains everything. LLs can no longer set prices in the PRS. Yeah been a few articles recently about rental prices falling and mostly blaming the boost to the sales market (makes no sense, every renter buying a house also means one less house on the rental market) But the absolute housing benefit cap filtering through could definitely be a cause. Quote Link to comment Share on other sites More sharing options...
bambam Posted October 13, 2013 Share Posted October 13, 2013 Maybe it's just me, but from looking at the rental market for family homes around London on RightMove, asking rents appear to be crashing. There appears to be a pattern of houses coming onto RightMove at prices that are generally lower than a year ago, sitting there for a couple of weeks, then having the price reduced by 10% or 20%. It seems like landlords are getting nervous. I saw this ad for a 4-bed house in Ascot this morning which struck me how out of synch prices and rents are becoming: http://www.rightmove.co.uk/property-to-rent/property-28315482.html They're asking £2500 a month (which I know is a lot of money), but considering that the house next door sold recently for £4.5 million, it seems like a bargain. The phenomenon of sub 3% gross yields appears to be spreading out from zone 1 London. Well if the house next door is Buckingham Palace, anything will look cheap. This: http://www.colmog.co.uk/news/archives/category/planting-ecology Is the house next door. The house for rent is Buttersteep Cottage, the one for sale was Buttersteep House. One is a mansion, the other is the caretaker's cottage, in relative terms. It's probably worth about £700k. Yield is over 4%. Still crap of course, you never get a good yield on family houses. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted October 13, 2013 Share Posted October 13, 2013 Anybody (be it landlord or letting agent or some evil hybrid of both) who risks even one void in return for an extra £100/month is either desperate, or as thick as pigshit. Does that really surprise you? These people ARE as thick as pigshit. They have NO IDEA AT ALL about the realities of life.... Quote Link to comment Share on other sites More sharing options...
Si1 Posted October 14, 2013 Share Posted October 14, 2013 <br />Rubbish.<br />I wish it was true but don't see it.<br />Flat above me went on for £450 p/w and was let in no time at all.<br />Demand is still there and until rates rise from 0.5% there will be more landlords coming to market and making a killing.<br /><br />It's all about the rate of return and until Carney and his mates raise rates nothing will change.<br /><br /><br /><br />awooga etc Quote Link to comment Share on other sites More sharing options...
Snugglybear Posted October 14, 2013 Share Posted October 14, 2013 I think you are confusing the Total Benefit Cap with the Housing Benefit Cap. They are 2 different things. The most recent figures I have are from 2011, and they show over 800,000 households claiming housing benefit in London that year. Housing benefit for the largest homes in central london has been reduced from £2000 per week to about £400pw. It is taking a while for the market to find a new level - but it's definitely happening. Oops, yes. Anyway, there should be confirmation when LHA is set again next April, one way or the other. Quote Link to comment Share on other sites More sharing options...
@contradevian Posted October 14, 2013 Share Posted October 14, 2013 (edited) Lord Freud has already hinted they are prepared to fix the benefit cap if landlords start to loose out, so any rent fall is likely to be short lived. Gotta keep them rents high and rising. Thats what rentier governments do. Edited October 14, 2013 by aSecureTenant Quote Link to comment Share on other sites More sharing options...
pjw Posted October 14, 2013 Share Posted October 14, 2013 It goes to show that rental prices and house prices do not always move in the same way. There is a maximum you can ask for from a tenant - ie the maximum anyone can afford to pay - and so landlords cannot always simply pass costs on. This is important in the LVT debate, as opponents of the LVT always say landlords would just pass it on to tenants - but they can't necessarily do so. they can try, that's all. Quote Link to comment Share on other sites More sharing options...
Venger Posted October 14, 2013 Share Posted October 14, 2013 I want to see lower rents. Outside London, I'm hoping to see some significant falls in rents at the lower-mid and upwards of the market. There are hints it's set to happen. Then there's this from the other day. An iplayer video with the article below as well, but I haven't watched it. Help to buy scheme 'could lower rents in London'12 October 2013 Last updated at 14:06 BST Rents in London could fall over the next few years as a result of the government's Help to Buy scheme, according to research by an estate agent. The scheme, which allows buyers to put down small deposits, has been criticised over fears it could cause house prices to rise. But estate agents Chesterton Humberts says people leaving the rental sector to buy homes will lead to a drop of up to 5% in rent rates over the next three years. But the housing charity Shelter says it will have no effect as house prices in the capital are too high. BBC London's Jean Mackenzie spoke to Chesterton Humberts' Richard Davies and Shelter's Toby Lloyd. http://www.bbc.co.uk/news/uk-england-london-24507742 Quote Link to comment Share on other sites More sharing options...
ReggiePerrin Posted October 14, 2013 Share Posted October 14, 2013 It goes to show that rental prices and house prices do not always move in the same way. There is a maximum you can ask for from a tenant - ie the maximum anyone can afford to pay - and so landlords cannot always simply pass costs on. This is important in the LVT debate, as opponents of the LVT always say landlords would just pass it on to tenants - but they can't necessarily do so. they can try, that's all. You can add, "or willing to pay" to your statement. Up to now demand has meant that tenants have been forced to accept higher rents, if demand were to drop and/ or the supply of rental property increases, then a lot of people will demand rent reductions..a power shift Anecdotal, but rents seem to be dropping in my part of the south west, there appears to be a bit of race to the bottom to get new tenants into properties. Quote Link to comment Share on other sites More sharing options...
winkie Posted October 14, 2013 Share Posted October 14, 2013 You can add, "or willing to pay" to your statement. Up to now demand has meant that tenants have been forced to accept higher rents, if demand were to drop and/ or the supply of rental property increases, then a lot of people will demand rent reductions..a power shift Anecdotal, but rents seem to be dropping in my part of the south west, there appears to be a bit of race to the bottom to get new tenants into properties. That can only be a good thing........some business is better than no business at all.....lower real incomes for people that have to rent mean a shortage of a supply of money. Noticed this recently in the lowering of some of the prices in restaurants, the quality the same but the prices for set meals lower.....those who have a choice can choose to pay the higher price for a more sophisticated menu, others have only two choices to pay what they can afford or not pay at all.....walk away. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted October 14, 2013 Share Posted October 14, 2013 I want to see lower rents. Outside London, I'm hoping to see some significant falls in rents at the lower-mid and upwards of the market. There are hints it's set to happen. Then there's this from the other day. An iplayer video with the article below as well, but I haven't watched it. http://www.bbc.co.uk...london-24507742 what was this "research from an Estate Agent"? Quote Link to comment Share on other sites More sharing options...
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