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Guest pioneer31

Something That The Bulls Forgot......

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Guest pioneer31

If IR's rise and BTL's get roasted and sell up, then that will decrase rental supply.........however more and more OO's will decide to rent that spare room out as they find themselves getting squeezed by higher monthly repayments.

Edited by pioneer31

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If IR's rise and BTL's get roasted and sell up, then that will decrase rental supply.........however more and more OO's will decide to rent that spare room out as they find themselves getting squeezed by higher monthly repayments.

You can find a hundred posts on this site stating with total certainty that there are thousands and thousands of unoccupied BTL investments in the UK - usually flats in "prime" city centre locations. Therefore it should follow that if (say) 50% of BTL investors sell up then there would be plenty of spare BTL capacity left for the evicted tenants to go to.

As well as there being plenty of spare BTL property for evicted tenants to go to, who is it that the BTL brigade would actually sell to? Thats right - it would be, in the main, to people who are currently renting. These people would see prices down or flat and would beg borrow and steal to buy them. If prices fell, the site of those "luxury apartments" at 15% off would be too much for them to resist.

Aside from the basic market reasons why your theory does not hold up, there are two other important factors. First, families or OO of any description will normally only try to rent a room out as a last resort. Who wants an unknown transient in their home? Even if an OO was moved to do this, chances are they wont live in a place people want to rent. The other point to recognize is why would a tenant want to rent a room from a family? Given how astonishingly cheap i keep hearing rents are, how BTL flats can be had for pennies a month etc etc, why trade that for a small room in someones family home?

Your theory i am afraid to say does not stand scrutiny.

Edited by HPC Convert

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Who wants an unknown transient in their home? Even if an OO was moved to do this, chances are they wont live in a place people want to rent. The other point to recognize is why would a tenant want to rent a room from a family?

Luckily for me my housemate wanted an unknown transient in her home, or I'd have had to rent a flat on my own, with bills, at twice the price!

As for renting with a family - depends on the family and the renter..... of course looking at families these days I'd not want to. But just 20-25 years ago it was VERY commonplace. My friend rented a room with a family - who had the rule that she wasn't allowed to bring in or eat beef.

And of course, don't forget singles are feeling the pinch - those with a 2nd bedroom can let that out as a houseshare. Very likely to be happening I'd say

Edited by ScaredEitherWay

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If IR's rise and BTL's get roasted and sell up, then that will decrase rental supply.........however more and more OO's will decide to rent that spare room out as they find themselves getting squeezed by higher monthly repayments.

No, I don't think so. The only sector this factor could affect is houseshares. and most of them are students, and most of the BTL guys who are happy to do student houseshares know what they're doing and in it for the long haul. You may be right for a tiny number of people, but it's not signifiacnt.

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Gumtree did a PR story last week saying that London rent-a-rooms were up 30% on their site since the interest rate rises. Probably you are right that families are not going to be into this very much, but my brother and his wife did it recently and they have two kids, so it is possible. Also, most people getting it tough with mortgage rises bought recently in last few years and probably don't have kids, and many are single. In that scenario, rent-a-room is more likely, and it's tax free. I wouldn't underestimate its ability to depress buy-to-let. It only takes a couple of per cent of demand drop at the margins to stop rents rising and maybe even put downward pressure on them.

I know someone who lets a lot of property and he talks about rents rising much higher as the way to bring the market back to equilibrium. Now what do you think is more likely right now? Rents rising sky high to justify his investment, or a fall in property prices? One of them has to happen.

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Luckily for me my housemate wanted an unknown transient in her home, or I'd have had to rent a flat on my own, with bills, at twice the price!

As for renting with a family - depends on the family and the renter..... of course looking at families these days I'd not want to. But just 20-25 years ago it was VERY commonplace. My friend rented a room with a family - who had the rule that she wasn't allowed to bring in or eat beef.

And of course, don't forget singles are feeling the pinch - those with a 2nd bedroom can let that out as a houseshare. Very likely to be happening I'd say

Are you saying that renting a room with a family was very commonplace 20-25 yrs ago but its not now?

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Luckily for me my housemate wanted an unknown transient in her home, or I'd have had to rent a flat on my own, with bills, at twice the price!

In your recent post on the joys of house sharing, you were rather less upbeat on how lucky you were as i recall:

.... house sharing just doesn't seem to be my ball (been doing it a month and already it feels like being in prison being in somebody else's house)

Forum: The main discussion forum on house prices · Post Preview: #706220 · Replies: 59 · Views: 2,214

Edited by HPC Convert

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Luckily for me my housemate wanted an unknown transient in her home, or I'd have had to rent a flat on my own, with bills, at twice the price!

In your recent post on the joys of house sharing, you were rather less upbeat as i recall:

I bet they're as easy to find as rocking horse shit... I am looking for one myself, that is, I am looking for a miniscule self-contained place to rent.... house sharing just doesn't seem to be my ball (been doing it a month and already it feels like being in prison being in somebody else's house)

Forum: The main discussion forum on house prices · Post Preview: #706220 · Replies: 59 · Views: 2,214

Edited by HPC Convert

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...

As well as there being plenty of spare BTL property for evicted tenants to go to, who is it that the BTL brigade would actually sell to? Thats right - it would be, in the main, to people who are currently renting. These people would see prices down or flat and would beg borrow and steal to buy them. If prices fell, the site of those "luxury apartments" at 15% off would be too much for them to resist.

...

It'll take a lot more than 15% for most people to buy back in. I think you underestimate the power of sentiment in a falling market as well as the intelligence of most would-be FTBs...

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It'll take a lot more than 15% for most people to buy back in. I think you underestimate the power of sentiment in a falling market as well as the intelligence of most would-be FTBs...

The FTB community is no more or less intelligent than any other community. My expectation that they will do things contrary to their best interests is therefore valid.

If you believe in a crash, which i assume you do - what makes you think anything other than lack of funds stops the current crop of FTB being any less eager for House purchasing and HPI than the previous crops? Has being priced out made them more thoughtful? Or are you saying that todays wannabe FTB population has all rejected property purchase because they know it will crash?

A quick look on priced out will tell you they are gaging for the action as badly as their predecessors, only they cant get into the action because they cant afford it. If prices drop 15% these people will queue in the rain for days to buy off plan.

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The FTB community is no more or less intelligent than any other community. My expectation that they will do things contrary to their best interests is therefore valid.

If you believe in a crash, which i assume you do - what makes you think anything other than lack of funds stops the current crop of FTB being any less eager for House purchasing and HPI than the previous crops? Has being priced out made them more thoughtful? Or are you saying that todays wannabe FTB population has all rejected property purchase because they know it will crash?

A quick look on priced out will tell you they are gaging for the action as badly as their predecessors, only they cant get into the action because they cant afford it. If prices drop 15% these people will queue in the rain for days to buy off plan.

Yes because 15% off is much better than buying last year with a lower IR in a rising market with accomodative lending practices?

If you were going to beg, steal and borrow they'd have done it already. "Afford" is the operative word here, it isn't all about price, its tiresome to do the sums but higher IRs, requirements for higher deposits etc. would mean 15% off is no more affordable. A wider issue is that in the mania plenty of people who shouldn't have bought did buy and went in well over their heads (more obvious in America but I don't think we are far different). This exaggerates demand and it won't be there in a falling market as a hairdresser might get the idea that taking out half a million in loans isn't really appropriate on a 15k salary.

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a slautory tale :Phttp://forum.richdad.com/forums/tm.asp?m=6...e=1&smode=1

i hope this link worksl not sure about these things. :unsure: its at the rich dad poor dat site.

I'll tread a dangerous path by pointing out this is in the US, not the UK so it is probably not relevant.... yet.

I'm currently renting in Bolton for £235 pm from a friend, this includes council tax, water rates, phone and internet. A very good deal!

Unfortunately I work in Altrincham so the commute is a bit of a killer, I'm thinking of putting some ad's up in the local shops in Warrington

seeing if anyone is interested in taking in a lodger. I reckon I'll start by advertising at the embarrassingly low price of £250 and see what I get.

I think this will be a good indicator of what people are really prepared to drop to, especially if they are now being squeezed on their mortgages.

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You can find a hundred posts on this site stating with total certainty that there are thousands and thousands of unoccupied BTL investments in the UK - usually flats in "prime" city centre locations. Therefore it should follow that if (say) 50% of BTL investors sell up then there would be plenty of spare BTL capacity left for the evicted tenants to go to.

As well as there being plenty of spare BTL property for evicted tenants to go to, who is it that the BTL brigade would actually sell to? Thats right - it would be, in the main, to people who are currently renting. These people would see prices down or flat and would beg borrow and steal to buy them. If prices fell, the site of those "luxury apartments" at 15% off would be too much for them to resist.

Aside from the basic market reasons why your theory does not hold up, there are two other important factors. First, families or OO of any description will normally only try to rent a room out as a last resort. Who wants an unknown transient in their home? Even if an OO was moved to do this, chances are they wont live in a place people want to rent. The other point to recognize is why would a tenant want to rent a room from a family? Given how astonishingly cheap i keep hearing rents are, how BTL flats can be had for pennies a month etc etc, why trade that for a small room in someones family home?

Your theory i am afraid to say does not stand scrutiny.

Anyone renting probably does so for one of a couple of reasons :

a) They like renting. They are happy renting, paying off the landlord's mortgage/ providing him/her with income. They are just plain happy to do that.

B) They cannot afford to pay a mortgage renting is a cheaper option

c) Short-term relocation.

d) I'm sure there are other reasons why someone prefers to rent, but as I can't think of any more major reasons, consider this a small set of people renting.

I would say most people renting fall into group (B). Now I think most BTL landlords think they can just whack the rental prices up becasue there is 'demand' for their property. But let me ask, just how far can you whack that rental up ? Right up the the level that pays the mortgage, or more than the mortgage payments ? Sure, try it.. but then if I were the tenant, surely I would think, hey, I could pay a mortgage off in what I'm paying in rent. I may as well buy. See you later Mr. Landlord.

Landlords must make it cheaper for his tenant to rent than to pay a mortgage otherwise the tenant will get itchy feet and look round for other places to stay or consider buying. Failing that they may just have to move in with someone else, thereby decreasing the demand for rented property.

Conclusion : Landlords probably will not make any money on their property and will have to subsidise their tenants throughout the whole time they own the property, unless this is a long established landlord who doesn't need to hike the rent up to cover their mortgage. Long established landlords are more likely to reduce their rent to make sure they get few rental voids.

Finally, when you mention families will not rent rooms out to total strangers unless they are desperate. Interest rates are going up, first time buyers are disappearing from the market. Things ARE starting to get desperate.

Edited by Bill

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