Badhairday Posted June 13, 2023 Share Posted June 13, 2023 1 hour ago, lastlaugh said: Has there been a significant sell-up of BTL yet? I’m not convinced. I agree that rents have skyrocketed. Certainly the sticker prices. But I don’t find the explanations for that convincing either. The sticker prices only tell a part of the story, and are a misleading price signal. They are, by implication, outliers in the market. Representing the point where the greediest landlords meet the most price-insensitive tenants. A small fraction of the overall market. I can't find ANY rental properties now, at last springs prices ....I think you will find that the rent increases are affecting more than a small fraction of the market.... Quote Link to comment Share on other sites More sharing options...
lastlaugh Posted June 13, 2023 Share Posted June 13, 2023 36 minutes ago, Badhairday said: I can't find ANY rental properties now, at last springs prices ....I think you will find that the rent increases are affecting more than a small fraction of the market.... For sure, rent increases at the top affect the whole market. And rents have increased, no doubt about that. But the sticker prices only tell you what is happening at the edge of the market. Many rentals are agreed before they get to EA windows, before they get to EAs even. Through contacts, personal recommendations, etc. Arguably it’s even more complicated. Given the short term nature of the PRS, I would say 95% of contracts are on short notice in any given year. And all these renters, and landlords, are making decisions to accept the status quo or change it. It’s what makes renting so stressful, right? Are they not active market participants too? Unlike homeowners who don’t move? Given that there is no way of knowing what is happening throughout the market, the sticker prices have to be seen as the upper boundary, not as an average, or even representative. With perhaps housing benefit rates representing the lower boundary? Yet landlords, and their lenders, see the sticker prices as achievable average rents. And BTL business models rely on this. But it only works while there is a supply of price-insensitive renters. Which is why I believe we have seen the paradox of increasing supply of BTL AND increasing rents. Quote Link to comment Share on other sites More sharing options...
shlomo Posted June 13, 2023 Share Posted June 13, 2023 4 hours ago, Badhairday said: To be fair, that is exactly what happened post covid - the number of properties for rent fell as BTLers sold up, and rents skyrocketed. This was counter intuitive, but it turns out that people are willing to share (HMO) whilst they are scrimping and saving for their own place, but once they buy it is a different story. So a 5 bed house, which was used as an HMO for 5 adults would be used by a couple maybe once it has been sold on. Do not forget a lot of the EX-BTL properties are empty that is something that is not considered in wht rents have shot up and can command a high number, but for how long Quote Link to comment Share on other sites More sharing options...
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