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AdamoMucci

Rents have "merely" kept pace with RPI over past five years

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https://www.lettingagenttoday.co.uk/breaking-news/2018/8/rents-have-only-just-kept-pace-with-rpi-o-ver-past-five-years--allsop

Quote

The survey analysed annual rent rises during five years to March 2018 across different regions and property types. 

Annual rent increases were closely tied to the rate of inflation, and Allsop says this is because affordability levels have weakened tenants’ ability to pay and thus effectively limited rent rises during the last decade, when wages have been stagnating.

 

B..b..but... the S24! The fees ban! Im gunna whack up the rents innit!! The interest rate rise!! Im gunna pass the costs on!!!

 

Quote

Rent levels have also been tempered by a high number of landlords letting properties at below market rate to keep tenants, the agency says.

God they are dumb. Why not charge more and still keep the tenants? Because they would leave? Sounds like the market rate to me then.

F'in fools.

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Yeah .. .amazing that.

Gidiiot bench marked LHA to lower 30% of private rents.

And rents remained there.

90% of private rents are determined by LHA.

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1 hour ago, AdamoMucci said:

God they are dumb. Why not charge more and still keep the tenants? Because they would leave? Sounds like the market rate to me then.

F'in fools.

There are a lot of clueless amateur BTL landlords out there. Probably in the millions. I think a mild recession would destroy a lot of them.

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But the Willsons are going to raise rents by 50GBP each because of the interest rate rise ... automatically and autocratically without any care for legal procedure or market forces, of course.

So the universe will be saved by the Power Of The Landlord (POTL) -> the new children's TV cartoon.

Until they are not, that is.

Sorry, a bit bitter this morning.

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Greed......they will ask for the highest rent they think they can get away with, any inkling of pay going up so do the rents, the train fares, gas and electricity, food.....etc........in one hand out of the other, and still we sit here getting poorer in real terms.......😉

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Rents only going up with inflation? Shocking! The government really must intervene to enable landlords to take an ever-increasing percentage of their tenants' savings! How else can these much-needed entrepreneurs survive? We've got a big problem in this country, the view that tenants should be able to work for themselves and not for their landlords. This really must be changed.

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1 minute ago, Riedquat said:

Rents only going up with inflation? Shocking! The government really must intervene to enable landlords to take an ever-increasing percentage of their tenants' savings! How else can these much-needed entrepreneurs survive? We've got a big problem in this country, the view that tenants should be able to work for themselves and not for their landlords. This really must be changed.

Yes, clearly - I agree. {echoing sarcasm}

All those reminders that rents will sky rocket when we stop feeding the 'engine of productivity' that is leeching the future from our current and future generation - were always going to happen because the arguments we so sound in logic and morals.

Ah, no  ... wait ...

;)

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4 minutes ago, Aidan Ap Word said:

Yes, clearly - I agree. {echoing sarcasm}

All those reminders that rents will sky rocket when we stop feeding the 'engine of productivity' that is leeching the future from our current and future generation - were always going to happen because the arguments we so sound in logic and morals.

Ah, no  ... wait ...

;)

Some words that always wave big red warning flags at me - "productivity", "growth", "efficiency", "progress."

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RPI is up about 13% over the last five years, the ONS Index of Private Housing Rental Prices is up 9%.

There's a reasonable and even-handed discussion of why rents don't spike upwards in the most recently freely available BDRC Rent Check (Spring 2016):

Quote

Rents are linked to tenants’ ability to pay not tenants’ ability to borrow. It is not possible to obtain bank lending to specifically cover high rental payments so there isn’t a leveraging affect that can push prices as for house prices. The ability to pay is key

Source

Also a sober warning about how tenants and rents behave in bad times:

Quote

Market rental levels are highly likely to be more volatile than house prices. While there is inbuilt market inertia that protects capital values since, in general terms, most homeowners will not sell at a loss and prefer to hold on to assets until prices are higher than they paid. Tenants on the other hand may choose to vacate for a number of reasons given the inbuilt flexibility of the AST framework. Landlords facing a vacancy are much more likely to offer an incoming tenant a lower rent if they face a lengthy period without a tenant.

 

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3 hours ago, winkie said:

they will ask for the highest rent they think they can get away with

If you always ask for the highest you can get away with, then your rents are set by what you can get away with and not by your costs.

 

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Simple maths on rental voids.

A 1 month void reduces yearly income by ~8%. 2 months - 16%, etc.

If you are letting out places at todays stupid low/sub 5% yields then you'll 2 years to 'earn' that lost 8%, 4 years for 16% etc etc.

If your tenant decides to not pay rent and sit it out til eviction then you are looking at 6 months void (~12 years 'profit') plus the legal costs and what not.

 

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26 minutes ago, BorrowToLeech said:

If you always ask for the highest you can get away with, then your rents are set by what you can get away with and not by your costs.

 

Correct......as I said, the poor will spoil it for those that would love to get wealthier from the real falling incomes of the majority......far to much competition out there for in real terms lower working incomes and real lower housing benefits.....we are all working, renting, consumers......not everyone rents a home, but more are having to rent many other things including debt........everyone works, but not all are paid with money......we all are consumers, some consume more than others.😉

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58 minutes ago, spyguy said:

Simple maths on rental voids.

A 1 month void reduces yearly income by ~8%. 2 months - 16%, etc.

If you are letting out places at todays stupid low/sub 5% yields then you'll 2 years to 'earn' that lost 8%, 4 years for 16% etc etc.

If your tenant decides to not pay rent and sit it out til eviction then you are looking at 6 months void (~12 years 'profit') plus the legal costs and what not.

 

I’ve heard of these voids a few times from BTL landlords so I think it’s more common than people realise. I’m not sure how much insurance costs, and the terms and conditions?

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Keep dividing the housing stock into ever smaller units and HMOs. The only constraint on rents and prices is the size of the human body.

Better believe it!

article-2084971-0F6811F700000578-728_634

 

 

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1 hour ago, zugzwang said:

Keep dividing the housing stock into ever smaller units and HMOs. The only constraint on rents and prices is the size of the human body.

Ah, so that's why you sometimes hear about the government wanting to tackle obesity. All makes sense now!

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1 hour ago, zugzwang said:

Keep dividing the housing stock into ever smaller units and HMOs. The only constraint on rents and prices is the size of the human body.

Better believe it!

article-2084971-0F6811F700000578-728_634

 

 

 

22 minutes ago, Riedquat said:

Ah, so that's why you sometimes hear about the government wanting to tackle obesity. All makes sense now!

As a tall person I am thus the lowest of the low (in a way). I can do something about my waistline (maybe) ... not much about my height.

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On 13/08/2018 at 16:19, zugzwang said:

Keep dividing the housing stock into ever smaller units and HMOs. The only constraint on rents and prices is the size of the human body.

Better believe it!

article-2084971-0F6811F700000578-728_634

 

 

Indeed this is why it is naive to say rents are restricted to ability to pay...they are not. Seems to be UKGOV policy to maintain conditions of scarcity for the obvious reasons. 

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I've found data about rents, wages, houses prices in 1900. The annual rent was £13, wages £100, 3 bed terrace £250. These gives around 10% spent on rent, house prices/salary ratio 2.5. If you compare this with current rents/house prices in London that is around 6 times less. It looks like rents have been rising as fast as house prices relatively to salaries

https://www.theguardian.com/money/1999/dec/18/mortgages.property1 warning it is from 1999)

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On 13/08/2018 at 17:59, Aidan Ap Word said:

 

As a tall person I am thus the lowest of the low (in a way). I can do something about my waistline (maybe) ... not much about my height.

i think you can rent power-tools pretty cheap

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1 hour ago, slawek said:

I've found data about rents, wages, houses prices in 1900. The annual rent was £13, wages £100, 3 bed terrace £250. These gives around 10% spent on rent, house prices/salary ratio 2.5. If you compare this with current rents/house prices in London that is around 6 times less. It looks like rents have been rising as fast as house prices relatively to salaries

https://www.theguardian.com/money/1999/dec/18/mortgages.property1 warning it is from 1999)

 

5% yield.... hmmm...

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On 13/08/2018 at 17:59, Aidan Ap Word said:

 

As a tall person I am thus the lowest of the low (in a way). I can do something about my waistline (maybe) ... not much about my height.

 

3 hours ago, jiltedjen said:

i think you can rent power-tools pretty cheap

Genuinely LOL.

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  • 244 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% +
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      • Even
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      • up 5%



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