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DT: Unprecedented in recent times': Rents across the UK set to fall this year

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Telegraph: Unprecedented in recent times': Rents across the UK set to fall this year

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Rents are predicted to fall across the UK in the next few months, according to HomeLet, which said the decline was "unprecedented in recent times". 

The average rent in the UK rose by just 0.7pc in the last 12 months, falling 0.4pc on a monthly basis in January. 

Rental price inflation has fallen for the last seven months, and HomeLet said that at the current rate of growth, that would go into negative territory soon. 

Rents have been falling in London and the south-east due to the surge in properties hitting the market after landlords purchased them before April to avoid a hike in stamp duty for buy-to-let homes. Now this decline may reach the rest of the country.

 

Oh dear, life getting harder everyday for the hardworking BTL LL.

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2 minutes ago, spyguy said:

Its not rent falls you have to worry about.

Its voids. Always voids.

Agree, voids are more dangerous than rents but there are some fools who are up to their eyeballs in debt.

BTL is being  crushed  made unattractive from all possible directions.... increased stamp duty, remortgaging hassles, over competition (HA new builds 20 - 35% cheaper to rent), possible IR hike ...

BTL LLs will soon know who the big boss is.

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3 minutes ago, CunningPlan said:

True. But the latter creates the former.

Eventually. How long do the current crop of mug punters wait until they start to chase the market down? One months void is 8% of the yearly gross and perhaps all (or more) of the years profit.. One can, in idle moments of fancy, imagine a horrible downward spiral of rents and BTL property prices for these mugs.

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It has happened in my village. Two very similar 2/3 bed terraces have always let for about £2,500 pcm. The price is mainly due to being in the catchment area of an excellent school.

School has changed the catchment criteria for siblings. Both properties, never normally empty for more than a few weeks, have been empty for six months and have chased each other down, so they are now on offer at £1,500 pcm. I think one has just let so has set a new floor.

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52 minutes ago, CunningPlan said:

It has happened in my village. Two very similar 2/3 bed terraces have always let for about £2,500 pcm. The price is mainly due to being in the catchment area of an excellent school.

School has changed the catchment criteria for siblings. Both properties, never normally empty for more than a few weeks, have been empty for six months and have chased each other down, so they are now on offer at £1,500 pcm. I think one has just let so has set a new floor.

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53 minutes ago, CunningPlan said:

It has happened in my village. Two very similar 2/3 bed terraces have always let for about £2,500 pcm. The price is mainly due to being in the catchment area of an excellent school.

School has changed the catchment criteria for siblings. Both properties, never normally empty for more than a few weeks, have been empty for six months and have chased each other down, so they are now on offer at £1,500 pcm. I think one has just let so has set a new floor.

My heart bleeds ...good news.

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1 hour ago, spyguy said:

Its not rent falls you have to worry about.

Its voids. Always voids.

Unless the rents dont cover the I/O 40 year mortge and they've been topping up the rent from their own incomes...and have just lost their jobs.

 

S**t storm coming, make no mistake.

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I don't think the "April surge" completely explains why rents are falling. Despite official figures showing a growing economy my personal feeling is that people are just getting less and less able to splurge most of their wage on shelter costs. If you're a house-buyer then the solution is simple borrow more innit, but that won't work for rents so downwards they go.

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BTL was brought in to enable a massive wave of migrant labour. Without financially shoehorning existing owners and prospective owners out of owner-occupier status there would have been no way for government and big business who both wanted to attract cheap labour to accommodate this influx.The government lied about the expected numbers right from the start.

The drop in sterling has made sterling income much less attractive, brexit vote has roundly thrown out any view that this was a publicly acceptable situation and the market pricing will adjust accordingly to the reduced demand. in the intervening years govt has kept new build restricted to ensure there was never a supply and demand balance which elevated not just rents but purchase price to keep the bubble frothing, but restricting supply is not enough if excess demand gets curtailed.

 

 

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I have just checked the availability of 2 bed properties in the school catchment. We seem to have had a very local black swan event.

For the school, until now all you needed to do was live in the (very small) catchment area for 12 months and you got 1st child in. Most people then moved back to their large houses that were being 'renovated' whilst they were away (to comply with the rules of primary residence). You could then happily send sprog 2, 3 or even 4 as you already had one there.

Since the school is a) non selective (so good for thick kids of rich people) and b.) gets results as good as many of the £18k p.a. private schools,  12 months living in a tiny place and £21k wasted rent was worth it if you were going to save £48k per kid on school fees over 4 years. You obviously played this trick with child one, hence a two bed flat would be OK.

However, siblings are also now subject to catchment area. Therefore, with second child, the two bed flat option doesn't really work, and you need to be there for probably three years rather than one. The prices have dropped from £1,750 to about £1,200 and are still unlet and going down. The rule change has really messed up the 'rent to get in' game and destroyed the rental value of the properties.

Happy days.

 

 

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27 minutes ago, Funn3r said:

I don't think the "April surge" completely explains why rents are falling. Despite official figures showing a growing economy my personal feeling is that people are just getting less and less able to splurge most of their wage on shelter costs. If you're a house-buyer then the solution is simple borrow more innit, but that won't work for rents so downwards they go.

LHA being reduced at long last.

Working/no tx credit EErs not coming back after christmas - fall from £1/E2 -> £1/E1.

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2 hours ago, mattyboy1973 said:

Eventually. How long do the current crop of mug punters wait until they start to chase the market down?

I moved last summer and in my area if a place was close to the available date and been on the market for approx 6 weeks they were knocking circa £50 off the pcm rent (in the £600-900 range), some had to make a second reduction. The place I'm currently in was advertised for 1 month and took £50 off which put it in my budget. I think the problem then was that many landlords were trying their luck to up prices as high as possible and suddenly found the ceiling as lots wasn't shifting.

 

On a separate note does anyone else despair that we live in a world where people happily use the phrase "unprecedented in recent times". I mean - FFS.

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5 minutes ago, Parkwell said:

On a separate note does anyone else despair that we live in a world where people happily use the phrase "unprecedented in recent times". I mean - FFS.

Yup - they obviously didn't bother to check what happened to rents during the 2008 crash

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37 minutes ago, Patient London FTB said:

Yup - they obviously didn't bother to check what happened to rents during the 2008 crash

The journalist was probably still at primary school then.

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18 minutes ago, Si1 said:

The journalist was probably still at primary school then.

Young journalist allowed to report on housing market in national newspaper? I'll take that as a piece of very good news!

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When they say 'across the country' there appear to be huge disparities.

I like to live in different countries and was wondering about the UK next year. Around the Lake District there are some pleasant areas . . . either side.

Here you can rent a 2-bed terrace for around 350 per month. 

On Rightmove, I notice that many places had already been on the market for 100 days and rents had been reduced. Some owners were offering the first month half-price and so on.

It definitely looks as if there's been a crash in the North West.

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5 hours ago, spyguy said:

Its not rent falls you have to worry about.

Its voids. Always voids.

Voids are falls.....if the tenant could pay they wouldn't void......if another tenant could pay there would be no voids.....if the price is set right the rent gets paid so no voids.;)

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4 hours ago, TheCountOfNowhere said:

This is hardly unprecedented.

Many people on here have seen their rents fall nominally or stay static/Less than inflation for 10 years.

 

 

The difference is that isn't generally reflected in whatever made up stats. The fact that the made up stats are showing falls means that it must be absolute carnage out there in the real world (as some poster's anecdotes appear to be demonstrating). 

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