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CunningPlan

How might a crash affect renters?

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Apologies if this has already been covered.

I intend to carry on renting for the next 10 years or so, regardless of what happens to house prices.

I am interested in what kind of stock will become available. I prefer to rent somewhere that was originally an owner occupier home, rather than always destined as a rental as the quality seems to be better.

I am guessing that, with a 30%+ drop, there will be a lot of negative equity, particularly in the South East.

There will always be people that need to move, or even those that can no longer afford their current home.

At the bottom end (1/2 bed flats), I assume a lot of landlords will bail out and FTBs will take their opportunity.

So does anyone think an increase in quality family homes to rent at sensible prices is likely to be one result of a price correction? 
 

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I think it is too soon to know what is happening yet.

There is one observation I made recently that may have a bearing in the short term. In my areas of interest (Bucks, Beds) there seems to be a market for homes under 250k . Everything else has stalled.

My feeling is that BTL'ers are still putting offers in on these cheaper homes as I've seen a few appear on LR and then in the "to rent" section. This means that inferior stock will be offered to rent. Up to now BTL'ers have been pricing out the FTB for the better 3 BR houses. Now they are concentrating on 1. 2 BR, or small 3BR terraced homes or in poorer areas than before. 

This means that the rental stock from new BTL is of inferior stock than before. It could also be pushing up prices for the sub 250K group or dragging down the price of anything close to the stamp duty band. 

There are still some larger properties going under offer in SALES  and I think these are going to older OO's. A friend sold her own large house recently (divorce) and it went to a couple of boomers.

That leaves all the better 3 bedders and the large 4/5 bed houses which are for rent or for sale.

 A quick look on RM showed the only 3 BR house to RENT close to me has just been reduced in price. A large detached 4 BR I saw advertised for RENT (for an arm and a leg) has disappeared now (not gone to rent agreed). Another 4BR semi (over 3 floors) hasn't been rented out and I recognise it from the last time I was looking for our current rental. Looks like no one stays in it for long.

There will be a different stock of houses coming on the market if BTL'ers only buy the sub- 250k market here.

There will be a mix of new BTL'ers with their cheaper homes, existing BTL'ers who pushed the FTB'ers out of the more desirable homes up to now and in addition the newer competition from frustrated sellers of larger properties who possibly won't get the riches they expect from renting. 

I don't know about flats but I am seeing more of these on the market in desirable areas.

Edited by Flopsy

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Where I am (NW London - Zone 6) there is a huge issue for "owners" of 3 bed semis. There just aren't any second steppers able to pay 500k.  The 3 beds are sitting on the market then being removed. A few come up to let and there are new lots of rental reductions on the 3 beds.   

One 4 bed detached I pass daily has been sitting on the market for 2 years with 5 x 20K deductions. Listed at 650k now 550k. it's just been left empty. I guess they don't want to sell with a sitting tenant? 

IMO sitting tenants vs voids will be an issue for the BTL's when they try to exit. No one buying a home wants a sitting tenant  

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