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rentose

When The Crash Comes,what Happens To Rent:

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A recession follows the housing market as it falls, and demand in the rental market falls.

Real rentals go down, as is starting to happen now.

From anecdotal experience.

Edited by BandWagon

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Potenially rents could go up, because as loads of BTL muppets dump their portfolios the amount of rental proerty decreases and reduces supply. However if a recession occurs people have less money so therefore can't afford high rents.

So on balance they are likely to stay about the same.

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Rents go up as people are stuck in the position of not being able to buy a house.

It is comical that many people here think that they will wait till prices drop and there is a crash and they will hop in and pick up a cheap house.

The reality is that everyone loses their job, not just householders, Banks tighten credit for everyone, and Governments put up interest rates for everyone as well.

In short, if a recession hits, then everyone will be shafted so you can forget about picking up a bargain unless you have hard cash.

My best days as a Landlord were during the recession, my rents were not much less than they are today I had people begging me for a room in my shared houses!!!.

As the recession fell away, people bought their own properties and moved out.

Its all about demand and supply, and in a recession demand in the rental sector is huge and more so today as all the council property is now in private hands.

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I'm afraid it is very true.

You might have 10% unemployed as a statistic............but if you are in and out of work as is many others then its hitting everyone.

Last recession public service workers managed to get some security, in the private sector very few managed to go through the whole deal in the same job. And many lost well paid jobs and had to take poorly paid jobs in place, now you dont see that is your statistics.

Also you wont see the short term contracts in the Statistics either.

To buy a house you need a secure job, your mortgage is for 25yrs not three months.

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Ian.............That pineapple on your right hand side by the table lamp......take a hold of it, find the rough end, drop your trousers..................and.............well you know the routine.

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Don't take Laurejon's point too literally

The point is, yes a HPC would solve one problem, but the recession NECESSARY for the HPC to occur would bring a whole host of other problems.

You think you'll be picking up a nice flat in London for £150k on a nice fixed rate mortage at 5%?

You think you'll be earning the same amount then as now?

You think you'll have the job security that will be needed as lenders tighten their criteria? Think again.

Remember the adage:- Banks lend you an umbrella when its sunny and take it back when it rains.

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Rents go up as people are stuck in the position of not being able to buy a house.

It is comical that many people here think that they will wait till prices drop and there is a crash and they will hop in and pick up a cheap house.

The reality is that everyone loses their job, not just householders, Banks tighten credit for everyone, and Governments put up interest rates for everyone as well.

In short, if a recession hits, then everyone will be shafted so you can forget about picking up a bargain unless you have hard cash.

My best days as a Landlord were during the recession, my rents were not much less than they are today I had people begging me for a room in my shared houses!!!.

As the recession fell away, people bought their own properties and moved out.

Its all about demand and supply, and in a recession demand in the rental sector is huge and more so today as all the council property is now in private hands.

I'm afraid it is very true.

You might have 10% unemployed as a statistic............but if you are in and out of work as is many others then its hitting everyone.

Last recession public service workers managed to get some security, in the private sector very few managed to go through the whole deal in the same job. And many lost well paid jobs and had to take poorly paid jobs in place, now you don't see that is your statistics.

Also you wont see the short term contracts in the Statistics either.

To buy a house you need a secure job, your mortgage is for 25yrs not three months.

This is correct. I know, I was there renting '90-'93.

I had to move very quickly to secure a room/flat. Get the paper early, etc. I remember being the first to view a tiny one bed flat. Signed the tenancy on the spot and handed over a month up front . There were three couples outside the front door when we left. In '93 I was subletting from a girl in a nice housing association flat off Ladbrooke Grove, it was all I could get for sensible money. If the LL accepted DSS he probably wouldn't need to advertise. I Had friends who lost their jobs and would pretend to be living as a couple just to get a better place on housing benefit.

Remember, this was during the time of double digit interest rates.

Edited by dom

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Rents go up as people are stuck in the position of not being able to buy a house.

It is comical that many people here think that they will wait till prices drop and there is a crash and they will hop in and pick up a cheap house.

The reality is that everyone loses their job, not just householders, Banks tighten credit for everyone, and Governments put up interest rates for everyone as well.

In short, if a recession hits, then everyone will be shafted so you can forget about picking up a bargain unless you have hard cash.

My best days as a Landlord were during the recession, my rents were not much less than they are today I had people begging me for a room in my shared houses!!!.

As the recession fell away, people bought their own properties and moved out.

Its all about demand and supply, and in a recession demand in the rental sector is huge and more so today as all the council property is now in private hands.

Lauriejohn, thank you.

That is some of the most honest comment I have ever read on this site. In my circle of friends, there are two who were landlords during the last crash. Both tell exactly the same tale as yourself.

When people are losing there homes, a thought many here salivate over, another 10+ years of council stock sale of means these people will find themselves in the hands of the Private sector, with the DSS picking up the tab.

A fact a lot of folk either forget or turn a convenient blind eye to.

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Lauriejohn, thank you.

That is some of the most honest comment I have ever read on this site. In my circle of friends, there are two who were landlords during the last crash. Both tell exactly the same tale as yourself.

When people are losing there homes, a thought many here salivate over, another 10+ years of council stock sale of means these people will find themselves in the hands of the Private sector, with the DSS picking up the tab.

A fact a lot of folk either forget or turn a convenient blind eye to.

Well since I am already in the private HMO market, I really don't care. Its not something that affects me untowardly. Since they are now introducing a local housing allowance to replace housing benefit, based on the median rent, it will probably force rents down. Suits me. Or should I care deeply about those who are currently better off than me? And before you judge me heartless, remember, they don't care much about me. I doubt that taxes will go up much, since they have reached their zenith, and if their is a recession this will be accompanied by the installation of a low tax government.

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Well, judging by what the actual Median of the rent is for comparable property, I doubt it'd be something worth getting stressed over as a Landlord.

If you want to be really cruel, you could look at what the ratio of supply/demand does to people, and what there willing to do, when property is concerned. The last 7/8 years of behaviour in this country will tell you all you need to know on that point.

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Very good question.

My guess is that they wont be affected too much, current landlords are very unlikely to drop their rents.

New ones buying cheaper may undercut them, so maybe after a while they will come down with the house prices...? :blink:

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Very good question.

My guess is that they wont be affected too much, current landlords are very unlikely to drop their rents.

New ones buying cheaper may undercut them, so maybe after a while they will come down with the house prices...? :blink:

Anecdotal:

I'm looking to rent another place in SW London.

I've had a vendor asking 1600 drop his price to 1500, and I've offered well below that.

The reason I can offer well below his expected price is because there are other better quality properties that have been standing empty, at a lower price. ie there is low demand.

I would suggest anyone currently looking offers 10 to 15% below asking on rentals.

Many landlords are about to discover they don't set the rents, but that they are set by the market.

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"The reason I can offer well below his expected price is because there are other better quality properties that have been standing empty, at a lower price. ie there is low demand."

I have to ask; why aren't you trying to rent those instead of the dodgy sounding hole your negotiating over?

Honest question. I mean, who likes living in a rat palace?

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"The reason I can offer well below his expected price is because there are other better quality properties that have been standing empty, at a lower price. ie there is low demand."

I have to ask; why aren't you trying to rent those instead of the dodgy sounding hole your negotiating over?

Honest question. I mean, who likes living in a rat palace?

The place isn't dodgy, it just isn't as new as the others.

I basically want to know each of their lowest acceptable rents, before I make a final decision.

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Rents go up as people are stuck in the position of not being able to buy a house.

It is comical that many people here think that they will wait till prices drop and there is a crash and they will hop in and pick up a cheap house.

The reality is that everyone loses their job, not just householders, Banks tighten credit for everyone, and Governments put up interest rates for everyone as well.

In short, if a recession hits, then everyone will be shafted so you can forget about picking up a bargain unless you have hard cash.

My best days as a Landlord were during the recession, my rents were not much less than they are today I had people begging me for a room in my shared houses!!!.

As the recession fell away, people bought their own properties and moved out.

Its all about demand and supply, and in a recession demand in the rental sector is huge and more so today as all the council property is now in private hands.

If the recession is a clone of the early 1990s recession, then yes. However, the crucial question is whether there will be a recession similar to that of the early 1990s. Notable differences between the early 1990s and today are:

1. Interest rates were at 15% during the early 1990s. I seriously doubt that they could ever top 8% over the next few years.

2. We didn't have the internet in the early 1990s.

3. House prices in the early 1990s reached a record low in relation to earnings. I seriously doubt they will fall below 1999 prices. Therefore anybody who bought before 1999 will not be in negative equity. The johnny come lately BTL investors will bear the brunt of a HPC rather than more established homeowners.

4. We didn't have so many immigrants from eastern Europe in the early 1990s. If a recession kicks in then many of them will pack up and leave. Low skilled migrant workers are usually the first to feel the impact of a recession and will cushion the blow that hits higher skilled natives.

5. The backlog of FTB priced out of the market will act as a brake to a fall in prices and many will buy when prices become affordable rather than wait until prices reach rock bottom.

Final point: Not everybody loses their job in a recession.

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Don't take Laurejon's point too literally

The point is, yes a HPC would solve one problem, but the recession NECESSARY for the HPC to occur would bring a whole host of other problems.

You think you'll be picking up a nice flat in London for £150k on a nice fixed rate mortage at 5%?

You think you'll be earning the same amount then as now?

You think you'll have the job security that will be needed as lenders tighten their criteria? Think again.

Remember the adage:- Banks lend you an umbrella when its sunny and take it back when it rains.

Yes, a recession will cause a whole load of problems and those hardest hit will be those on low incomes, the young (potential FTBers) and the over indebted.

But the question was about whether rents will rise during a HPC. This time is different in as far as the muppet BTL factor is so much greater than in the late 80s. This combined with low interest rates would suggest that rents will not rise significantly.

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This time is different in as far as the muppet BTL factor is so much greater than in the late 80s. This combined with low interest rates would suggest that rents will not rise significantly.

Don't forget all those CLNBs, too. I can't see rents rising much - although I guess it depends on where you're located.

Edited by vicster

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Guest pioneer31

Rents go up as people are stuck in the position of not being able to buy a house.

It is comical that many people here think that they will wait till prices drop and there is a crash and they will hop in and pick up a cheap house.

The reality is that everyone loses their job, not just householders, Banks tighten credit for everyone, and Governments put up interest rates for everyone as well.

In short, if a recession hits, then everyone will be shafted so you can forget about picking up a bargain unless you have hard cash.

nothing like blowing things out of all proportion is there?

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I think rents will depend on the exact conditions for the area and property to be rented.

I don't think central london rents will dip dramatically. I also feel many prime (Regency, Georgian, Edwardian etc.) house property is unlikely to fall.

I do think that in areas of heavy 1&2 bed luxury flat developments that the prices of these will decrease due to oversupply. I already have a couple of friends in similar flats who tell me half their block or more is empty... once the BTL investors realise the score they only have three options:

a) lower rents

B) sell property

c) borrow more to cover losses

Either one is a downwards trend propagator and the first two will affect the sales/rental markets by increasing supply at a lower cost.

- Pye (Property Speculation Ninja :ph34r: )

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laurejon ( :ofruit_pineapple2.gif:lol: ) is correct that recession will, and is, following prices down.

The economic climate will be very different to what it is today, with or without the spin.

In 1999 we had some kind of industry, 2006 the picture is now different.

Each time I lost a job I got another one quickly because I had no choice.

Typically that means lower wages.

The Government sector is about to get ‘massacred’. (IMO, sometime soon)

What goes up when house prices come down:

1. Negative equity.

2. Repossessions.

3. Bankruptcies.

4. Years stuck in property you can’t sell.

5. Economic inactivity.

6. Unemployment.

7. something else.

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All dependant upon the area you live I think

Where I live there's a huge increase in properties available for rent..that tells me BTL's have overestimated the demand and therefore rents will continue to decrease regardless of a HPC

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  • 336 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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