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There are a lot of new blocks of flats, Executive apartments coming on stream in SW8, and lots more over the last few years. Expectations have been high in regards to getting top dollar for rentals but the reality is somewhat different.

Who know's what the expectations were with these purchases but huge reductions and long voids can't be good for the savvy investors!!!

Here's a few examples

http://www.zoopla.co.uk/to-rent/details/42671631

First listed
£5,417 pcm on 20th Dec 2016

Asking rent changes
  • £6,283 pcm 16.0% Increased on: 21st Dec 2016
  • £4,767 pcm 24.1% Reduced on: 18th Jan 2017
  • £4,333 pcm 9.1% Reduced on: 31st Jan 2017
  • £3,900 pcm 10.0% Reduced on: 8th Feb 2017
  • £3,683 pcm 5.6% Reduced on: 27th Feb 2017
  • £3,250 pcm 11.8% Reduced on: 11th Apr 2017
  • £2,817 pcm 13.3% Reduced on: 26th May 2017

 

http://www.zoopla.co.uk/to-rent/details/41145658

First listed
£10,833 pcm on 27th Jul 2016

Asking rent changes
  • £8,667 pcm 20.0% Reduced on: 10th Jan 2017
  • £5,850 pcm 32.5% Reduced on: 30th Jan 2017

 

http://www.zoopla.co.uk/to-rent/details/42911316

First listed
£4,117 pcm on 8th Feb 2017

Asking rent changes
  • £4,242 pcm 3.0% Increased on: 11th Mar 2017
  • £4,117 pcm 2.9% Reduced on: 18th Mar 2017
  • £3,250 pcm 21.1% Reduced on: 8th May 2017
  • £2,860 pcm 12.0% Reduced on: 11th May 2017

 

www.zoopla.co.uk/to-rent/details/42891062

First listed
£4,333 pcm on 6th Feb 2017

Asking rent changes
  • £3,683 pcm 15.0% Reduced on: 2nd Mar 2017
  • £3,250 pcm 11.8% Reduced on: 18th Apr 2017

 

 

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13 minutes ago, TheCountOfNowhere said:

Who's renting these places !!!!!

No-one judging by those price drops. 

These really are the tulips, aren't they? 

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Bankside, please be more careful with your headlines in these troubled times. My heart stopped for a moment when I thought that yet another insane immigrant, bent on destroying people's lives, was loose around a residential area; rather than being locked away where the authorities put him, in the bank of England.

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13 minutes ago, Toast said:

Bankside, please be more careful with your headlines in these troubled times. My heart stopped for a moment when I thought that yet another insane immigrant, bent on destroying people's lives, was loose around a residential area; rather than being locked away where the authorities put him, in the bank of England.

Ha, Nice one!

 

And a hat tip for the correct usage of the word "loose" ;)

 

4 minutes ago, Unexpected said:

Not normal rents so nothing to see here. 2 bed flats at 1400 pcm are still flying off the shelves.

It's been a long while since I saw 2 bed rentals at that rate within zone 2.

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Just realised it's Battersea which would explain the extortionate rents. Walked past the development recently and wouldn't want to live there if you paid me. It's a horrible characterless place.

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36 minutes ago, Unexpected said:

Not normal rents so nothing to see here. 2 bed flats at 1400 pcm are still flying off the shelves.

 

30 minutes ago, Unexpected said:

Just realised it's Battersea which would explain the extortionate rents. Walked past the development recently and wouldn't want to live there if you paid me. It's a horrible characterless place.

You're winning the internet for me today Unexpected.

Who'd have thought that flats appearing on a thread called "Carnage in SW8" might be anywhere near Battersea. Where will this thread title/topic content mismatch end.

If you walk around with your eyes closed I guarantee that there's "nothing to see". :rolleyes:

But then maybe you have a reason to see things one way and not another way? ;)

 

Edited by Pumpkin Muad'Dib

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1 hour ago, Bankside said:

There are a lot of new blocks of flats, Executive apartments coming on stream in SW8, and lots more over the last few years. Expectations have been high in regards to getting top dollar for rentals but the reality is somewhat different.

Who know's what the expectations were with these purchases but huge reductions and long voids can't be good for the savvy investors!!!

Here's a few examples

http://www.zoopla.co.uk/to-rent/details/42671631

First listed
£5,417 pcm on 20th Dec 2016

Asking rent changes
  • £6,283 pcm 16.0% Increased on: 21st Dec 2016
  • £4,767 pcm 24.1% Reduced on: 18th Jan 2017
  • £4,333 pcm 9.1% Reduced on: 31st Jan 2017
  • £3,900 pcm 10.0% Reduced on: 8th Feb 2017
  • £3,683 pcm 5.6% Reduced on: 27th Feb 2017
  • £3,250 pcm 11.8% Reduced on: 11th Apr 2017
  • £2,817 pcm 13.3% Reduced on: 26th May 2017

 

 

Warms the cockles.

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Guest

I love it, but ...

If you got a handful of colleagues/people off the street and showed them the initial asking rent, and current asking rent, and showed them that RENTS HAVE COME DOWN, and house purchase asking prices HAVE COME DOWN, you would just get blank expressions. Most people simply cannot take it in.  They would think it is fake news, or a typo, or hocus pocus. At best they would think it was a case in a million, not like the 99.9999% of rents/houses that go up in value.

But I dont care. because if and when people come to sell a property, or rent out a property, all EAs will eventually all say "it wont rent for that" or "it wont sell for that". The penny will slowly drop.

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6 minutes ago, Grab_Some_Popcorn said:

I love it, but ...

If you got a handful of colleagues/people off the street and showed them the initial asking rent, and current asking rent, and showed them that RENTS HAVE COME DOWN, and house purchase asking prices HAVE COME DOWN, you would just get blank expressions. Most people simply cannot take it in.  They would think it is fake news, or a typo, or hocus pocus.

That's because real rents didn't drop by that much. There's an article in the Guardian today - rents dropped from 904 to 901 (May 2016 -> May 2017).

I rented this place for 1200. Moving soon (I bought), the landlord is still asking for 1200. 

Sure, rents have dropped for flats going for 6-10k..how does that help your colleagues? They can't afford it at the latest price anyway 2.8k down from 6.2k).

So of course they wouldn't believe it. What you're talking about is an extreme example most people couldn't get near anyway. In the real world, where 2 bed flats go for 550-1600 (depending on area), rents didn't go down (much). 

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14 minutes ago, flb said:

There's an article in the Guardian today - rents dropped from 904 to 901 (May 2016 -> May 2017).

Maybe you should have read the article

"However, the typical new rent in London has fallen by 3% in a year. The weaker market in the capital has seen average rents fall from £1,572 a month in July 2016 to £1,502 in May. "

 

https://www.theguardian.com/money/2017/jun/06/uk-rents-fall-london-brexit

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23 minutes ago, Peter Hun said:

Maybe you should have read the article

"However, the typical new rent in London has fallen by 3% in a year. The weaker market in the capital has seen average rents fall from £1,572 a month in July 2016 to £1,502 in May. "

 

https://www.theguardian.com/money/2017/jun/06/uk-rents-fall-london-brexit

This is from the article.

 

Quote

The average monthly rent on a new tenancy that started in May was £901, which was down 0.3% on the May 2016 figure of £904

 

You're probably just looking at London. But even then, while someone may have reduced the price by 3% (just for reference, that means ~1167 instead of 1200 - big deal!), not everyone did. Like I said, my landlord is still asking for 1200. 

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12 minutes ago, jimmy2x3 said:

6k+ prob 6k deposit. ie 12k the price of a new car just to have a roof over yer head for a month. 

 

i bet i could live in the ritz for less

Deposit is still an asset that will be returned intact provided the conditions are met.

The best I found for The Ritz was £418/night, but for every 10 nights you get one free which is a 9.1% discount. Therefore you can't live in the Ritz for less (then again it's not in SW8) but I agree with the sentiment that it is an awful lot of money.

My view is that this is not unlike PCL. My view is the people paying these rents are not your average worker or even highly paid city boys but rather corporate lets or foreign nationals dissuaded from buying (for the moment?). 

What would be really interesting would be to see the purchase prices, or what they were renting for previously. That was we might determine how much they have overpaid for their flats and how far below the mortgage payments the net yield is.

I can put my house up for rent for £1m/month but there's no way on God's Green Earth that I'd get even 1% of that. Reducing it wouldn't make rents crash in Wokingham but it would expose me as a cretinous rent seeking spiv.

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1 hour ago, Pumpkin Muad'Dib said:

 

You're winning the internet for me today Unexpected.

Who'd have thought that flats appearing on a thread called "Carnage in SW8" might be anywhere near Battersea. Where will this thread title/topic content mismatch end.

If you walk around with your eyes closed I guarantee that there's "nothing to see". :rolleyes:

But then maybe you have a reason to see things one way and not another way? ;)

 

Simply explained by me not knowing that SW8 was Battersea. Call me lazy. I admit I don't know the SW's at all. I am not in favour of price rises but just don't think it's useful for people to get their hopes up based on rents that normal people could never afford. As your research has dug up, I have done OK in my purchase but I do not come on here rubbing people's noses in it. I hardly ever post these days and I wish justice for every HPCer as I think it's crazy the way things are.

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17 minutes ago, adarmo said:

My view is that this is not unlike PCL. My view is the people paying these rents are not your average worker or even highly paid city boys but rather corporate lets or foreign nationals dissuaded from buying (for the moment?). 

I think an important addendum to that is to observe that *nobody* is paying those rents but a glut of property is being offered at those rents.

My take is that this is potentially a piece of anecdotal evidence that since 2013-ish London has been driven my speculation which is completely divorced from fundamentals. One suspects that a lot of that speculation is with foreign money and that a lot of that foreign money is leveraged. If the foreign money is indeed significant and is also leveraged then when you add in the enormous amount of UK BTL you have a very precarious market which looks like it has already turned. Things are definitely getting interesting. They might be about to get very interesting indeed.

Edited by Pumpkin Muad'Dib

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1 minute ago, Unexpected said:

Call me lazy.

Going to pass calling you lazy as I don't find it to be a sufficiently compelling explanation.

I do like the idea that somebody who has been a member of the forum for 12 years thinks that five years is a reasonable point to decide whether or not a UK property investment has worked out or not. Plenty of buy-to-let landlords who were ball's deep in crap flats in the North East would have told you the self same thing in 2008 but would tell you something very different today.

I am out on this conversation, you can have the last word (well on this thread, for the time being at least).

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1 minute ago, Pumpkin Muad'Dib said:

I think an important addendum to that is to observe that *nobody* is paying those rents but a glut of property is being offered at those rents.

My take is that this is a potentially a piece of anecdotal evidence that since 2013-ish London has been driven my speculation which is completely divorced from fundamentals. One suspects that a lot of that speculation is with foreign money and that a lot of that foreign money is leveraged. If the foreign money is indeed significant and is also leveraged then when you add in the enormous amount of UK BTL you have a very precarious market which looks like it has already turned. Things are definitely getting interesting. They might be about to get very interesting indeed.

Addendum accepted.

If it is leveraged foreign speculation then we're possibly looking at another 'Great Unwinding'. Imagine holding the debt in USD, or Euros, or anything that has appreciated v the GBP and now trying to make the payments based on plummeting rental expectations. 

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10 minutes ago, Pumpkin Muad'Dib said:

Going to pass calling you lazy as I don't find it to be a sufficiently compelling explanation.

I do like the idea that somebody who has been a member of the forum for 12 years thinks that five years is a reasonable point to decide whether or not a UK property investment has worked out or not. Plenty of buy-to-let landlords who were ball's deep in crap flats in the North East would have told you the self same thing in 2008 but would tell you something very different today.

I am out on this conversation, you can have the last word (well on this thread, for the time being at least).

You're all right there I don't need it but thanks.

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42 minutes ago, flb said:

This is from the article.

 

 

You're probably just looking at London. But even then, while someone may have reduced the price by 3% (just for reference, that means ~1167 instead of 1200 - big deal!), not everyone did. Like I said, my landlord is still asking for 1200. 

You'd expect rents to track incomes, more or less.   So a three percent fall in one year isn't nothing and even a zero percent change before inflation is significant.  

If it happened to GDP it'd be a recession.

We're so used to house prices, which have seen borderline hyperinflation, that these small changes look like nothing in comparison. 

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1 minute ago, DrBuyToLeech said:

You'd expect rents to track incomes, more or less.  

I'm not sure whether I was born when that was still true. 

If rents were somewhat related to incomes, there'd be no such thing as a "flatshare" or driving 2 hours just to get to work (because you have to rent in a galaxy far, far away...)

That used to be true and it SHOULD be true, but ... I doubt it still is.

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