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Rental House Price Crash Around London


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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...y-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 was originally sceptical of the idea of rental prices dropping, but having got round to looking - I don't think it is just you. About March time a 2 bed flat around me would have been around £1300, not so now down from £1250 to £900! Granted that's a bit of an outlier, but the majority of 2 beds now start at £1100.

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what was this "research from an Estate Agent"?

Good question.

This apparently. The musings of one of their directors apparently.

I am confident that the mortgage guarantee scheme will be of a great benefit to a large number of purchasers, particular first time buyers who will now find themselves able to secure a mortgage. However, there is a risk that by focusing too much on demand and not enough on supply we could be creating the conditions for another housing bubble – although we are currently far from that.

Help to Buy will almost certainly heighten competition amongst buyers in the market and will consequently push property prices. The biggest impact will no doubt be in London, where there is already a severe housing shortage, and particularly the lower end of the market. However, the impact will not be restricted to the sub-£600,000 section of the market, [as homeowners continue to climb the property ladder], and we would expect to see increased transactions levels and price growth across the entire market.

This should have a knock on effect for the mid to upper end of the market too, increasing transactions, increasing stock and thus price.

It will be interesting to see the scheme’s impact on the lettings market. More landlords may find their tenant(s) giving notice as they move away from the private rented sector and into home ownership. Dependent on the scale of first time buyers taking advantage of the Help to Buy scheme, this could seriously impact the number of rental properties coming to the market for re-letting which could in turn see rental levels fall. Chesterton Humberts are able to advise landlords on current market conditions and rental levels to ensure that their property is let quickly, efficiently and without extended periods of vacancy.

04 October 2013 http://blog.chestertonhumberts.com/residential-sales/help-to-buy.html

Followed a few days later by a guess at 5%?

Early launch of Help to Buy 2 will have biggest impact on London rents

Help to Buy could drive average monthly rents in the capital down by as much as 5%

Author: Chesterton Humberts

Date: Monday, October 07, 2013

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Well, this rental price crash doesn't seem to have reached Brentford in outer west london yet - modern 2-bed flats seem to be going for £1500 to £1650 per month. An increase of £100 per month compared to a couple of years ago.

This despite plenty of new similar flats being built in the area.

Typical example: http://www.rightmove.co.uk/property-to-rent/property-41060194.html .

To buy a similar flat would probably be £320K - £380K, giving a rental yield of just over 5% though once you deduct service charges at around 2.5K / year that drops to more like 4% ...

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Well, this rental price crash doesn't seem to have reached Brentford in outer west london yet - modern 2-bed flats seem to be going for £1500 to £1650 per month. An increase of £100 per month compared to a couple of years ago.

This despite plenty of new similar flats being built in the area.

Typical example: http://www.rightmove...y-41060194.html .

To buy a similar flat would probably be £320K - £380K, giving a rental yield of just over 5% though once you deduct service charges at around 2.5K / year that drops to more like 4% ...

Mental.

What on earth is there to support that?

Work, shopping, rich foreign students going to an outstanding Uni?

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Well, this rental price crash doesn't seem to have reached Brentford in outer west london yet - modern 2-bed flats seem to be going for £1500 to £1650 per month. An increase of £100 per month compared to a couple of years ago.

This despite plenty of new similar flats being built in the area.

Typical example: http://www.rightmove.co.uk/property-to-rent/property-41060194.html .

To buy a similar flat would probably be £320K - £380K, giving a rental yield of just over 5% though once you deduct service charges at around 2.5K / year that drops to more like 4% ...

It would be interesting to know what rents are actually achieved in that area Is this the area along the elevated section of the A4 with several residential towers going up? I did a quick browse of 2-beds in TW8 on RightMove, and every other one describes itself as a brand-new new build. Of the 24 new listings in the last 14 days, 2 have gone to Let Agreed, one at £1400 per month and one at £1150, but I can see what you mean when you say the average asking is quite a bit higher. Umm, good luck with that, Mr. BTLer.

At this point, I hope that most tenants have figured out that you need to bargain and the asking rent is only a starting point (I think many have).

Edited by richc
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There are a lot of mediocre 1 or 2 beds on the market in West London. Reckon I can find a 20% reduction as property bee is showing some advertised (and dropping) for 40+ weeks. Think it's a combination of a lot of things: HtB, mass exodus of antipodeans and UC/HB

As for Brentford it only exists for the GSK building and the football club once every fortnight.

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  • 3 weeks later...

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...y-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.

Anything new on the Rent Price Crash?

Affecting detached/bigger/more expensive market-value homes the hardest?

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It would be interesting to know what rents are actually achieved in that area Is this the area along the elevated section of the A4 with several residential towers going up? I did a quick browse of 2-beds in TW8 on RightMove, and every other one describes itself as a brand-new new build. Of the 24 new listings in the last 14 days, 2 have gone to Let Agreed, one at £1400 per month and one at £1150, but I can see what you mean when you say the average asking is quite a bit higher. Umm, good luck with that, Mr. BTLer.

At this point, I hope that most tenants have figured out that you need to bargain and the asking rent is only a starting point (I think many have).

I rented an almost identical flat to this, same block, in Brentford, in 2009.

http://www.rightmove...y-43111415.html

They were asking £1,350pm in 2009, we negotiated to £1,280pm. This one now asking £1,400, so with the usual negotiating there really isn't much difference in price and a load more new builds have sprung up since then. Kew or Chiswick it is not.

Edit: This is Chiswick, I lived nearby this road for a while and it's an infinately better than Brentford in every way, transport included. It's cheaper. I think Brentford is in la la land. http://www.rightmove.co.uk/property-to-rent/property-43068242.html?premiumA=true

Edited by Starla
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Not sure, but I wonder if the changes which came into place on 1st April 2013 are starting to take affect - that exemptions for empty properties are now set locally (and most councils / london boroughs that I can see are setting them at 0% - ie no exemption). This means that for a Band D property in Lambeth, £1228 a year needs to be paid if the property is empty or not... exacerbates the effect of a void so an encouragement to drop the rent to get someone in?

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Well, this rental price crash doesn't seem to have reached Brentford in outer west london yet - modern 2-bed flats seem to be going for £1500 to £1650 per month. An increase of £100 per month compared to a couple of years ago.

This despite plenty of new similar flats being built in the area.

Typical example: http://www.rightmove.co.uk/property-to-rent/property-41060194.html .

To buy a similar flat would probably be £320K - £380K, giving a rental yield of just over 5% though once you deduct service charges at around 2.5K / year that drops to more like 4% ...

I thought there'd been a credit crunch in Brentford yrs ago...

...

:P

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  • 433 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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