Jump to content
House Price Crash Forum

Could This Be The Trigger?


karhu

Recommended Posts

0
HOLA441

I have noticed that quite a few rental properties around where I live have been on the market for several months. This morning I was wondering why this could be, so I did some searching on the internet.

I was surprised to find that rental asking prices have increased substantially since last year. There's a flat in the block in which I'm living that is advertised for £100pcm more than we are paying!! I thought that because they were struggling to rent that they would decrease their prices rather than taking > 6 month void period????? Sounds like denial to me.

Are landlords finally facing up to the fact that they can't make ends meet and trying to pass their costs on to tenants? At these prices I doubt that they are going to find tenants very quickly and this is going to put a lot of landlords into a serious cashflow problem. Sooner or later those "to let" signs are going to become "for sale" signs, unless they wake up to the reality that they have to match their prices with those that tennants are willing to pay.

Has anyone else noticed this?

Link to comment
Share on other sites

1
HOLA442

I have noticed that quite a few rental properties around where I live have been on the market for several months. This morning I was wondering why this could be, so I did some searching on the internet.

I was surprised to find that rental asking prices have increased substantially since last year. There's a flat in the block in which I'm living that is advertised for £100pcm more than we are paying!! I thought that because they were struggling to rent that they would decrease their prices rather than taking > 6 month void period????? Sounds like denial to me.

Are landlords finally facing up to the fact that they can't make ends meet and trying to pass their costs on to tenants? At these prices I doubt that they are going to find tenants very quickly and this is going to put a lot of landlords into a serious cashflow problem. Sooner or later those "to let" signs are going to become "for sale" signs, unless they wake up to the reality that they have to match their prices with those that tennants are willing to pay.

Has anyone else noticed this?

I am well over the average wage but where I live I can not comfortablby pay the rent on a one bed flat. I have been sharing houses with similar people for the last 3 years. The rents do seem to be getting worse.

Link to comment
Share on other sites

2
HOLA443

The rents do seem to be getting worse.

I was talking about rental asking prices.

I can also reveal more interesting data.

Three of the flats in our block have been up for sale in the last year (two have now sold - one is still up for sale). Interestingly, they were all the same size and on the same floor - so as similar as you can possibly find.

I've no idea what they finally sold for, but I did check the advertisements.

The first was advertised at "Offers over £180,000" (Oct last year, sold after c. 3 months).

[i found this flat on houseprices.co.uk - it sold for £160,000, 89% of asking price]

The second was advertised at "Offers around £179,000" (Went to sold a month ago, but no one has moved in).

The third, which is not sold, is advertised at "Offers around £174,950"

I checked the specs and pictures of each one to check that they were exactly the same - they are quite modern flats so even the windows are the same.

Not much change, but definitely hints at a downward trend.

Edited by karhu
Link to comment
Share on other sites

3
HOLA444

I've visited a few flats at Discovery Dock in South Quays where the rents being asked can be outrageous. One of the agents admitted that the landlords (particularly the paper millionaire BTLers) would rather have the flats empty than knock a few quid off the rent to get someone in. The reason? because they have huge mortgages to cover the obviously overpriced properties. So thanks to dumb BTLers, they've effectively increased demand for other rental properties by pricing themselves out of the market

Link to comment
Share on other sites

4
HOLA445

would rather have the flats empty than knock a few quid off the rent to get someone in.

This is not the behaviour of a professional landlord who has a good buisness plan. This is the behaviour of an amateur landlord in denial or someone with money to burn.

In economic terms it's better to reduce rent asking prices by 20% rather than having a 6 month void.

Once interest rates increase they landlords will have to bail.

Edited by karhu
Link to comment
Share on other sites

5
HOLA446

These are the people who will go bust first.

As they go bust then competition will reduce, allowing those who survived to put their rents up. I also suspect that those who survive will be the ones who have been in the market along time and have small or no mortgages. So they are likely to make a profit on much lower rents than the high geared John-cum-latelies.

Link to comment
Share on other sites

6
HOLA447

These are the people who will go bust first.

As they go bust then competition will reduce, allowing those who survived to put their rents up.

Aha. BUT!! There will be more properties on the market (for sale) driving selling prices down, consequently allowing more FTBs in and reducing demand for rental properties. Therefore, rents for these properties will not go up or down. The only effect will be to wipe out the amateur landlords who paid above the odds and didn't think about yield and bring these properties back onto the open market.

Link to comment
Share on other sites

7
HOLA448

I am finding rents are dropping as the landlords wake up and smell the coffee, we negotiated £300 pm off.

The house we are renting is £900 and was on the market for £450k so after months of not selling we are happy to keep it warm for them until they come to their senses :)

The trouble is their are still so many idiots paying the asking price for houses, because they fell in love with it, it's so fustrating.

Link to comment
Share on other sites

8
HOLA449
9
HOLA4410
10
HOLA4411
11
HOLA4412

I have noticed that quite a few rental properties around where I live have been on the market for several months. This morning I was wondering why this could be, so I did some searching on the internet.

I was surprised to find that rental asking prices have increased substantially since last year. There's a flat in the block in which I'm living that is advertised for £100pcm more than we are paying!! I thought that because they were struggling to rent that they would decrease their prices rather than taking > 6 month void period????? Sounds like denial to me.

Are landlords finally facing up to the fact that they can't make ends meet and trying to pass their costs on to tenants? At these prices I doubt that they are going to find tenants very quickly and this is going to put a lot of landlords into a serious cashflow problem. Sooner or later those "to let" signs are going to become "for sale" signs, unless they wake up to the reality that they have to match their prices with those that tennants are willing to pay.

Has anyone else noticed this?

I am quite hoping that these ones go bankrupt. This is one group I don't have any deep feeling or compassion for. OK so they are spaced out and financial novices, but they are also greedy. When the hammer falls they will also be the first to feel sorry for themselves and blame someone else. Let 'em eat cake.

Link to comment
Share on other sites

12
HOLA4413

I've visited a few flats at Discovery Dock in South Quays where the rents being asked can be outrageous. One of the agents admitted that the landlords (particularly the paper millionaire BTLers) would rather have the flats empty than knock a few quid off the rent to get someone in. The reason? because they have huge mortgages to cover the obviously overpriced properties. So thanks to dumb BTLers, they've effectively increased demand for other rental properties by pricing themselves out of the market

Well, if you insist on living in London what do you expect? I'm moving out of London in the summer and have been looking for places to rent on Rightmove. I can afford a top spec 2 bed penthouse or a 3 bed detached family home. Ahhh, decisions decisions...........

Link to comment
Share on other sites

13
HOLA4414

Is it a way of saying "With rents this high - you may as well buy"?

Not really. I'm talking about a spread between what landlords are willing to accept and what tenants will offer. It leads to empty properties that are deriving no income whatsoever.

Link to comment
Share on other sites

14
HOLA4415

spoken to a few agents about renting in and around york in the last week - 'private'landlords will not budge on price - they would rather sit on a void, which even the agents have said is stupid - i have had offers of 20% reductions on asking from companies with multiple properties just because i pointed out that there were lots empty

Link to comment
Share on other sites

15
HOLA4416

We were going to go ahead with renting a 3-bed flat with sea views for £700 a month. This was back in Aug laste year. The landlord happened to mention through the agent that the rent would go up to £750 after 6 months as he was fitting new carpets! We declined to proceed with the flat as it would be too much.

Guess what - it has been empty ever since we looked, that's 6 months missed income!!

Link to comment
Share on other sites

16
HOLA4417

Where I live properties are always available for rent, quite a nice area really. However I have seen absolutley no increases in what they asked for pcm and this to me indicates that demand for rental properties is not quite as high as everyone expects. There are a number of reason for this, many people choose to live with family or share homes with friends these days..EA's have way overestimated the BTL market I think.

Also with the added effect of fuel rises and the lunatic increases in council tax it makes logical sense to share rented homes.

Greed=Inflation=collapse

long may EA's pretend everything is just fine! a complete misunderstanding of the market and head in sand attitude

Link to comment
Share on other sites

17
HOLA4418
'private'landlords will not budge on price - they would rather sit on a void, which even the agents have said is stupid -

Landlords holding out for 'top rents' certainly works for me.

The trick to minimising voids is to always offer slightly below market rents.

The numbers are simple.

Say 'market rent' for a particular property type in a particular area is £500 pcm. Often landlords will put their props on at £525, expecting to be negotiated down to £500. I, on the other hand will put ours on at around £480 almost without fail viewings will be immediate and first to view will take it.

So we wil 'lose' around £240 p.a. on rent, but then Mr 'asking £525' will probably have 2 or 3 months voids before he gets his prop off the market. Cost to him? perhaps £1,500.

So which is better for the landlord? Higher asking rent or lower asking rent.

I'm self employed, and I use the same technique when selling my professional services.

Edited by JohnG
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information