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Bearfacts

Rental Flats Loosing Value At Annualised Rate Of 36%

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A heart warming read:

http://www.timesonline.co.uk/article/0,,2097-2069621,00.html

According to figures from ARLA (Association of Residential Landlords –are you a member TTRTR ?) the value of rental flats has fallen 9% in the last 3 months alone. Making an annualised fall of , mmm let me see now , that would be 36% … sounds a bit like crash territory to me !

To quote further from the article ‘ They ( most investors) know that buy-to-let is a loosing proposition so for the past two years they‘ve been looking elsewhere (except for TTRTR , L.L etc of course !).

Rather puts all the recent cobblers about booming BTL into perpective doesn’t it ?!

Presumably just more P.R drivel from the V.Is.

This got me thinking though, if flats are loosing value so rapidly how come the overall average house figure quoted by Halifax and N/W seems to be holding up ?

So for what its worth here is my theory: I think chains are being built without the first link or the FTB / flat owner. This is being achieved by E.As etc persuading the person second from bottom of the chain to rent out their existing property instead of selling it and move on. This of course greatly increases their borrowings and exposure to any falls in value or void periods in rentals. Very very risky and surely unsustainable. This isn’t totally a theory, we came across a potential landlord who was planning to do just this thing, he wasn’t second from the bottom of the chain either but some way up. Utter , utter madness but you could see the glint of greed/smugness in his eyes when he said he was thinking of holding on to it as an investment. He had tried to sell it and failed, he had also tried renting it out and from what we see failed, because now he is trying to sell it again at some grossly inflated, laughable figure.

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Very interesting theory indeed Bearfacts and it wouldn't suprise me at all if this was the case. Just one question - the % decrease you mention for the rental property - is that actually in the value of the property or is it in yield?

Thanks for this post - very encouraging!

By the way - I'm doing my bit for the revolution and making sure our landlords 'yield' is dropping rapidly -

My husband and I have:

demanded a new fridge

a new cooker

the whole house repainted

whole house recarpeted

new garden fencing

new kitchen sink

garden tidied up

new boiler

bathroom tiles re-grouted

if he's making any profit at all from us, it's because he bought the house pre-ridiculously-gigantic-boom (PRGB). Even so, we like to get our moneys-worth! Tee Hee Hee

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88crash,

What is the monthly rent of the 4 properties you have been looking at, if you don't mind my asking?

Yep, we don't want to know prices, we want to know yields.

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... the value of rental flats has fallen 9% in the last 3 months alone. Making an annualised fall of , mmm let me see now , that would be 36% … sounds a bit like crash territory to me !

What's the standard practice for anualising data such as this? Should it be 4*0.09 = 36% OR 1 - 0.91^4 = 31.4%

Edited by TimG

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I think chains are being built without the first link or the FTB / flat owner. This is being achieved by E.As etc persuading the person second from bottom of the chain to rent out their existing property instead of selling it and move on.

ive been staggered by the immense amount of chain free property on rightmove in my area (northants).

probably a combination of BTL'ers bailing and people with bridging loans??

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88crash,

What is the monthly rent of the 4 properties you have been looking at, if you don't mind my asking?

The 500K places are approx £1700 and a nice place that we are going for tomorrow is £1800 which is probably worth 650-750K at todays ridiculous prices

Good rental value from my POV

The agents have suggested that the £1700 rental price would be closer to £1500 for a 'serious' offer

PS these muppet imitation landlords are looking to lift close to 20K per annum, yet they can't be bothered to put a bit of magnolia paint on the lounge, so you view these places seeing shabby rooms and then they wonder why they haven't rented them yet????

2nd PS Thats called a void, but these dumbf*cks wouldn't know the meaning of the word

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My husband and I have:

demanded a new fridge

a new cooker

the whole house repainted

whole house recarpeted

new garden fencing

new kitchen sink

garden tidied up

new boiler

bathroom tiles re-grouted

If I was your landlord -

'fridge - if the existing one works - effoff

Whole house repainting - magnolia walls, white ceiling - rent rise on the way

Whole house recarpeted - individual rooms done on as needed basis - don't hold your breath

New garden fencing - repairs will be made if necessary

New kitchen sink - if necessary

Garden tidied up - oh dear, look at the state of the garden, you are in breach of your tenancy agreement. Tidy it or get 2 month's notice.

Bathroom regrout - next time the handyman is in - 2 hours work.

HTH :rolleyes:

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So for what its worth here is my theory: I think chains are being built without the first link or the FTB / flat owner. This is being achieved by E.As etc persuading the person second from bottom of the chain to rent out their existing property instead of selling it and move on. This of course greatly increases their borrowings and exposure to any falls in value or void periods in rentals. Very very risky and surely unsustainable.

Good theory, Bearfacts.

I wrote recently (on another thread) that a credit squeeze is under way at the bottom of the pyramid, with the result that Mr Average has been priced out of the market at present.

The prospective landlord you met (would that make him a Keep-To-Let?) may be placing too much faith in the old adage, "it's better to owe the bank a lot of money than a little"..

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If I was your landlord -

'fridge - if the existing one works - effoff

Whole house repainting - magnolia walls, white ceiling - rent rise on the way

Whole house recarpeted - individual rooms done on as needed basis - don't hold your breath

New garden fencing - repairs will be made if necessary

New kitchen sink - if necessary

Garden tidied up - oh dear, look at the state of the garden, you are in breach of your tenancy agreement. Tidy it or get 2 month's notice.

Bathroom regrout - next time the handyman is in - 2 hours work.

HTH :rolleyes:

Well - you're not my landlord!! He agreed to it all and it's all been done! Lucky me! By the way JohnG - I'm not renting because I have to - my husband and I have between us enough money for at least a 50% deposit on a largeish, detached property in our area - we're just not going to waste our money in an overpriced market when it will go oh-so-much further in a year or two..... If you seriously still have a property portfolio then you're either in denial about the real economic situation here in the UK or just a little bit naive.

Edited by wifeling-smi

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However it does beg the question, How many 4 bedroom 500K+ houses does one person need?

My grandad, alva sholem, always said "you can only eat three meals a day". Wise words!

frugalista

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If I was your landlord -

'fridge - if the existing one works - effoff

Whole house repainting - magnolia walls, white ceiling - rent rise on the way

Whole house recarpeted - individual rooms done on as needed basis - don't hold your breath

New garden fencing - repairs will be made if necessary

New kitchen sink - if necessary

Garden tidied up - oh dear, look at the state of the garden, you are in breach of your tenancy agreement. Tidy it or get 2 month's notice.

Bathroom regrout - next time the handyman is in - 2 hours work.

HTH :rolleyes:

Excellent! I guess some (most?) landlords actually believe they're in the driving seat :lol:

My favourite was "Tidy it or get 2 month's notice." Voids, what are voids? :lol:

It took my landlord 8 months to have their last tenant evicted, followed by 3 months voids - ouch!

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If I was your landlord -

'fridge - if the existing one works - effoff

Whole house repainting - magnolia walls, white ceiling - rent rise on the way

Whole house recarpeted - individual rooms done on as needed basis - don't hold your breath

New garden fencing - repairs will be made if necessary

New kitchen sink - if necessary

Garden tidied up - oh dear, look at the state of the garden, you are in breach of your tenancy agreement. Tidy it or get 2 month's notice.

Bathroom regrout - next time the handyman is in - 2 hours work.

HTH :rolleyes:

LOL, does that work, I doubt it.

Whenever I ask for anything to be done I expect it to be done bloody quick. And usually it is. If it isn't I use that to get the rent to remain the same after 12 months or to get a rental decrease.

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Very interesting theory indeed Bearfacts and it wouldn't suprise me at all if this was the case. Just one question - the % decrease you mention for the rental property - is that actually in the value of the property or is it in yield?

Thanks for this post - very encouraging!

By the way - I'm doing my bit for the revolution and making sure our landlords 'yield' is dropping rapidly -

My husband and I have:

demanded a new fridge

a new cooker

the whole house repainted

whole house recarpeted

new garden fencing

new kitchen sink

garden tidied up

new boiler

bathroom tiles re-grouted

if he's making any profit at all from us, it's because he bought the house pre-ridiculously-gigantic-boom (PRGB). Even so, we like to get our moneys-worth! Tee Hee Hee

LOL.

I'm renting my house out at the moment while I'm living with my girlfriend.

If you made these sort of demands to me I would laugh in your face. I would sooner see the place empty for a few months than put up with tenants like you.

If he has conceded to your demands I would suggest that the place was a complete sh*t-tip before you moved in.

:lol::lol::lol:

Edited by devslim

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  • 301 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
      • up 2.5%
      • up 5%



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