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Over Supply Of Rental Properties

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I've saved a search on rightmove to track increases in rental properties available in my area. There does seem to be a sudden flood of new listings... Glut caused by new landlords trying to beat 3% stamp duty? Could bring down rents and house prices?

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I've seen lots of new property for rent in my are - of the type I am renting now. What I don't understand is how some are sitting on the market for months with the prices unchanged. And why they keep being "re-added" so they show up as a "new" listing every few weeks. What's the deal? Why not just lower the price?

These are 2 bedders on for around £1250 a month. I'm paying £975. If they were a similar price then I would look at them seriously.

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Seems s logical outcome from the BTL splurge just before the 3% deadline.

I think rents will have a downward pressure, purely as potential buyers (if able) would go out and buy. For those who can't buy it's much more normal to underhouse yourself, or stay at home.

I don't think the number of people who can't buy is the same as the number of renters at all.

I would never buy a studio flat but I would rent one.

big influx of rentals will drive prices down, it's worth seeing a few you like and asking for dirt cheap rents.

I'm surprised no-one has made an online market place for rents.

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I've seen lots of new property for rent in my are - of the type I am renting now. What I don't understand is how some are sitting on the market for months with the prices unchanged. And why they keep being "re-added" so they show up as a "new" listing every few weeks. What's the deal? Why not just lower the price?

These are 2 bedders on for around £1250 a month. I'm paying £975. If they were a similar price then I would look at them seriously.

Actually it's fairly simple why they don't. Boils down to a couple of things, psychology (hubris / lack of realism /greed), not having done your sums and cold hard money.

Mr Scum buys his BTL, mortgage is say £750 a month and he has been told its worth £1000pcm, he figures out if he goes to IKEA gets some cheap furniture and repaints the place in magnolia the place will be sorted and let in a few weeks (and a couple of months rent will pay for furniture). Pays the mortgage out his own cash, pays for the furniture out of his own cash, place goes to the letting agent and he's sure it'll be let in a week or two. Doesn't get let, pays another months mortgage, now it's hurting his own pocket. The agent might suggest lowering the price, but because Mr Scum has lost £1500 of his own cash he doesn't want to reduce the rent because he wants his money back (he might even want to raise the rent). Another month and it gets worse, Mr Scum will dig himself into a hole and will only reduce the rent when he is forced to.

These people aren't businessmen or entrepreneurs like they claim they are. They haven't done the research or sums, they've probably never heard of void and so never accounted for them.

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If there is no physical shortage of property or indeed an oversupply of physical property, but the property is being held off the market by hoarding landlords then it will show up as empty rental properties.

The number of empty rental properties is an interesting metric for measuring physical oversupply.

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Rentals have been in oversupply in London since as lond as I've been in the market (ca 20 years now).

I pay barely more in rent on my current place than the original asking price from 7 years ago (about 5%). This is so-called 'prime london'. Meanwhile prices are up 50% or more.

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I'm looking to rent somewhere pretty soon, for the first time in 4 years and rents seem to have not moved much (bristol) while house prices have doubled.

Hopefuly the new landlords will feel the pinch.

I moved to Bristol just over 2 years ago. The sort of places I was looking at seem to have gone up 25% or more in that time (eg 2 bed flats near Temple Meads, 2 bed houses in places like Totterdown or Brislington). It was difficult to actually get in to see places, as they would go within a few days of coming up.I'm having to move now, after 2 years in this place, and it's no better. I've taken a 10% rise in rent for an identical place but with no white goods or garage.

If you are going to rent in Bristol, I'd leave yourself plenty of time.

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I've seen lots of new property for rent in my are - of the type I am renting now. What I don't understand is how some are sitting on the market for months with the prices unchanged. And why they keep being "re-added" so they show up as a "new" listing every few weeks. What's the deal? Why not just lower the price?

These are 2 bedders on for around £1250 a month. I'm paying £975. If they were a similar price then I would look at them seriously.

It's also possible that they aren't even available for rent at all - a new poster whose name I forget recently highlighted the EA practice of re-listing previous rentals when they aren't actually available, just to make themselves look busier in order to attract new custom (both from LLs and renters I guess).

One way to prove it - try ringing up about a few of the most suspicious looking ones, and see if the EA tells you that it's just gone that morning, but that he has another similar* one nearby that you could take a look at.

* Which invariably turns out to be more expensive and less attractive.

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I've saved a search on rightmove to track increases in rental properties available in my area. There does seem to be a sudden flood of new listings... Glut caused by new landlords trying to beat 3% stamp duty? Could bring down rents and house prices?

Not sure.

There's been some new rentals on the market - LL will have ass served to them on that.

I do see a lot of long time rentals hanging around for months. I'd guess people's money is still falling. AndLHA reductions are lowering rentals.

The PRS is driven by job creation. There's not been much.

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People are renting differently, living at home, renting spare bedrooms, sub-letting.....word of mouth, employer providing accommodation etc....why the benefits of certain types of renting does not warrent the cost.

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Kent Reliance's 3rd BTL report (08/12/15) examines PRS demand, rental affordability and the impact of the new tax/regulatory changes to BTL finance here:

http://www.legalandgeneral.com/mortgageclub/_pdfs/digest/081215_BTL_Britain_Report.pdf

[since the recession] The average rent per property has risen 8.3% annually, climbing to an average of £897 per month. This compares to a 6.1% annual increase in the second quarter. Wage inflation has improved in 2015, boosting tenant finances.However, it still lags rental inflation. Over the last year, the average weekly wage in the UK has risen 3.1%.This gap has persisted since the recession.
Average wages have risen 15.6%, but rents have soared 26.7% over the same period. Meanwhile, house prices in England and Wales have risen 21.6% over the same period. We would broadly expect rental increases to track house price growth, as landlords look to recoup the increased cost of investment and monthly finance costs.
Overall, by September the total rental income collected by landlords across the country had risen to £5.0bn per month, up 7.9% year on year. Landlords collected rent of £56.7bn in the last year, up by £8.1bn compared to a year ago. London’s PRS has the greatest sway over the figures. Alone, London’s tenants pay almost two fifths (38%) of Great Britain’s rent, a total of over £25bn. It is followed by the South East 13.8%), and the North West (8.1%).
Edited by zugzwang

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I moved to Bristol just over 2 years ago. The sort of places I was looking at seem to have gone up 25% or more in that time (eg 2 bed flats near Temple Meads, 2 bed houses in places like Totterdown or Brislington). It was difficult to actually get in to see places, as they would go within a few days of coming up.I'm having to move now, after 2 years in this place, and it's no better. I've taken a 10% rise in rent for an identical place but with no white goods or garage.

If you are going to rent in Bristol, I'd leave yourself plenty of time.

I moved to bristol 25 years ago. I lived in St.George, BS5 which was cheaper than popular areas, because it wasn't in any way trendy, just like me.

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I moved to bristol 25 years ago. I lived in St.George, BS5 which was cheaper than popular areas, because it wasn't in any way trendy, just like me.

I was in Bristol even longer ago. Not in such a posh part as you, but not too far from it.

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I was in Bristol even longer ago. Not in such a posh part as you, but not too far from it.

What do you mean, not as posh. We had a reptile shop, Bristol Rovers shop (only open Saturday morning), and a place that sold outboard motors, not to mention Jade's massage parlour, and we had a cracking tattoo place, and Chasers night club in Kingswood, where murders happened. :blink:

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Kent Reliance's 3rd BTL report (08/12/15) examines PRS demand, rental affordability and the impact of the new tax/regulatory changes to BTL finance here:

http://www.legalandgeneral.com/mortgageclub/_pdfs/digest/081215_BTL_Britain_Report.pdf

Always a little bit suspicious of commentators that use the LSL rental index which appears to rise stratospherically out of all keeping with the other measures which on the face of things might be expected to be more robust that such an obvious VI source.

The Office for National Statistics publishes an index of private housing rental prices (IPHRP).a This index attempts to adjust for changes in the types of properties being privately rented over time – so, unlike actual rents paid measured in the Family Resources Survey, it is attempting to measure a ‘pure’ quality-adjusted price. This series was recently revised, after flaws were discovered in the previous measure which led it to seriously understate growth in private rental prices. The new IPHRP measure still shows much less rent growth than the FRS (or the Survey of English Housing). It suggests that, between 2005–06 and 2012–13, private rental prices fell by 8% in real terms. The FRS suggests that actual rents paid by private renters grew by 2% in real terms between 2005–06 and 2012–13. Between 2007–08 and 2012–13, the IPHRP shows a real-terms fall of 8%, while the FRS shows a real-terms increase of 2%.

Source: IFS Briefing Note BN161 Housing: Trends in Prices, Costs and Tenure

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LSL is formed by averasghing all ridding rents and not counting falling ones.

An index by an EA not a statistician!

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What do you mean, not as posh. We had a reptile shop, Bristol Rovers shop (only open Saturday morning), and a place that sold outboard motors, not to mention Jade's massage parlour, and we had a cracking tattoo place, and Chasers night club in Kingswood, where murders happened. :blink:

I mean what I say, not as posh.

https://www.google.co.uk/maps/place/Bristol+BS5/@51.4665276,-2.5639322,3a,66.8y,11.15h,89.69t/data=!3m4!1e1!3m2!1sWO1jKkD6d69mDY6ujlojbg!2e0!4m2!3m1!1s0x48718e154c975629:0x6a2e40a424e3d763

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What do you mean, not as posh. We had a reptile shop, Bristol Rovers shop (only open Saturday morning), and a place that sold outboard motors, not to mention Jade's massage parlour, and we had a cracking tattoo place, and Chasers night club in Kingswood, where murders happened. :blink:

We had the Apollo, a petrol station, the best chippy for miles, and an amazing pet shop. Didn't mean we weren't the 26th most deprieved ward in Manchester.

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I'm amazed people put up with the crap contracts and charges from rip of agencies, but I guess you have to live some where

Yes, people do not tend to stay in rip off places for the long-term...emergency measure means for the short-term only until something better comes along = higher unoccupancy = higher cost.

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I've saved a search on rightmove to track increases in rental properties available in my area. There does seem to be a sudden flood of new listings... Glut caused by new landlords trying to beat 3% stamp duty? Could bring down rents and house prices?

Back to the topic, one strand that of policy is making the tax treatment of lodgers much more generous. I wonder if the churn through the PRS as exiting BTLers sell up is driving some younger renters back into parental homes and also into mate's spare bedrooms. I know that the accepted line over at PovertyLater is that everything always drives up demand for rental property, but that's contentious IMO. Further, if house prices start to fall then some of these people who've bailed into life a lodger or boomeranged back to their childhood bedroom may chose to hold up where they are and see how far things can fall.

Demand for rental property could be a moveable feast in a ways the BTL gang are not expecting. We shall see.

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I was in Bristol even longer ago. Not in such a posh part as you, but not too far from it.

Believe me it doesn't take long for the once worst shit hole place to live in becomes the best thing ever since sliced bread.....belive me I have seen it.....and there are people that will always believe it.....they were sold it....and it don't come cheap....happy days.;)

Edited by winkie

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