Jump to content
House Price Crash Forum
Sign in to follow this  
Ash4781

No Need For Rental Surgery

Recommended Posts

http://property.timesonline.co.uk/tol/life...penComment=true

No need for rental surgery

The fact that somebody is prepared to take a punt on the market coming back at some stage could be viewed as positive

David Smith

When does bad news become good? On the face of it, the Spanish bank Santander’s knockdown bid for Alliance & Leicester, a stalwart of the UK’s mortgage market, showed what a swathe the credit crunch has carved through the housing sector. Yet the fact that somebody is prepared to take a punt on the market coming back at some stage could be viewed as positive.

The latest survey from the Royal Institution of Chartered Surveyors (Rics), which showed a net 88% of surveyors reporting falling house prices and the average number of sales per surveyor dropping to 15.3 over the latest three months, the lowest on record, also looked like unalloyed bad news. Rics, however, chose to emphasise that price numbers are less negative than they were, that buyer inquiries and agreed sales are falling less rapidly, and that predators are starting to circle in search of bargains.

Rics also found little evidence of forced selling by either home-owners or buy-to-let landlords. A report commissioned by the Association of Residential Letting Agents (Arla) suggests landlords who can stay in the market would be sensible to do so. The report, The Modern UK Housing Market - Origins and Prospects, by Professor Michael Ball of Reading University, notes the rise of the private rented sector from near extinction to a £500 billion asset class in recent years. There are more than 1m landlords.

Ball says that new investment in buy-to-let is indeed likely to fall as credit becomes more difficult to obtain – but, although borrowing costs are rising, a big sell-off is, he believes, “unlikely”, thanks to the strength of rental demand. Potential home-buyers, who were deterred by high house prices and lack of affordability, are now prevented from buying by tougher lending criteria.

What will be the result? “Given rising demand in a context of less supply, rents in many areas are likely to rise quite significantly in the short run, unless the UK economy plunges into a sharp recession,” Ball concludes. “Although it is difficult to predict short-term changes in housing rents, increases of 10%-15% in both 2008 and 2009 may well occur, outside a relatively limited number of areas with a significant glut of properties.”

Though the report was commissioned by Arla and the National Federation of Property Professionals, it argues that the private rented sector will stabilise, rather than drag down, the market. What’s good for landlords, of course, may not be such good news for tenants.

:lol:

Edited by Ash4781

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable

Yeah, my rent's doubled in a week. I just can't find anywhere else to rent at all.

Share this post


Link to post
Share on other sites

Less supply? :blink::rolleyes:

When he says "1m landlords" I assume he is including all the BTL seminar victims with their city portfolios either standing empty or earning sparodic rents way below their finance costs?

Share this post


Link to post
Share on other sites
Yeah, my rent's doubled in a week. I just can't find anywhere else to rent at all.

Doubled? you were locky!

Share this post


Link to post
Share on other sites
Doubled? you were locky!

I'd give anything just to have had by rent double! My landlord quadrupled mine, I couldn't find anywhere else to rent now I'm sleeping under a bridge in a cardboard box with a leaky roof with only the financial section of the Sunday Times to keep me warm at night! :lol:

Share this post


Link to post
Share on other sites

http://property.timesonline.co.uk/tol/life...icle4352937.ece

No need for rental surgery

The fact that somebody is prepared to take a punt on the market coming back at some stage could be viewed as positive

David Smith

When does bad news become good? On the face of it, the Spanish bank Santander’s knockdown bid for Alliance & Leicester, a stalwart of the UK’s mortgage market, showed what a swathe the credit crunch has carved through the housing sector. Yet the fact that somebody is prepared to take a punt on the market coming back at some stage could be viewed as positive.

The latest survey from the Royal Institution of Chartered Surveyors (Rics), which showed a net 88% of surveyors reporting falling house prices and the average number of sales per surveyor dropping to 15.3 over the latest three months, the lowest on record, also looked like unalloyed bad news. Rics, however, chose to emphasise that price numbers are less negative than they were, that buyer inquiries and agreed sales are falling less rapidly, and that predators are starting to circle in search of bargains.

Rics also found little evidence of forced selling by either home-owners or buy-to-let landlords. A report commissioned by the Association of Residential Letting Agents (Arla) suggests landlords who can stay in the market would be sensible to do so. The report, The Modern UK Housing Market - Origins and Prospects, by Professor Michael Ball of Reading University, notes the rise of the private rented sector from near extinction to a £500 billion asset class in recent years. There are more than 1m landlords.

Ball says that new investment in buy-to-let is indeed likely to fall as credit becomes more difficult to obtain – but, although borrowing costs are rising, a big sell-off is, he believes, “unlikely”, thanks to the strength of rental demand. Potential home-buyers, who were deterred by high house prices and lack of affordability, are now prevented from buying by tougher lending criteria.

What will be the result? “Given rising demand in a context of less supply, rents in many areas are likely to rise quite significantly in the short run, unless the UK economy plunges into a sharp recession,” Ball concludes. “Although it is difficult to predict short-term changes in housing rents, increases of 10%-15% in both 2008 and 2009 may well occur, :lol: outside a relatively limited number of areas with a significant glut of properties.”

Though the report was commissioned by Arla and the National Federation of Property Professionals :lol::lol: , it argues that the private rented sector will stabilise, rather than drag down, the market. What’s good for landlords, of course, may not be such good news for tenants.

Edited by uncle_monty

Share this post


Link to post
Share on other sites
I'd give anything just to have had by rent double! My landlord quadrupled mine, I couldn't find anywhere else to rent now I'm sleeping under a bridge in a cardboard box with a leaky roof with only the financial section of the Sunday Times to keep me warm at night! :lol:

A cardbord box?! In six months' time you'll have to borrow 4 times your salary to get a cardbord box.

Share this post


Link to post
Share on other sites
A cardbord box?! In six months' time you'll have to borrow 4 times your salary to get a cardbord box.

Its different this time

Share this post


Link to post
Share on other sites

No need for an introduction to this perennial error maker and incompent fool of the Sunday Times.

When not predicting the imminent crash of the price of commodities, $40 oil, or turnaround in the economy, this clown has a property column. His latest oeuvre:

http://property.timesonline.co.uk/tol/life...icle4352937.ece

A few choice falsehoods from his column:

"although borrowing costs are rising, a big sell-off (By BTLers) is, he believes, “unlikely”, thanks to the strength of rental demand. Potential home-buyers, who were deterred by high house prices and lack of affordability, are now prevented from buying by tougher lending criteria.

...commissioned by Arla and the National Federation of Property Professionals, it argues that the private rented sector will stabilise, rather than drag down, the market. What’s good for landlords, of course, may not be such good news for tenants"

I've been viewing flats to rent in SE London (Rotherhite, Blackheath, Greenwich, Docklands) over the last few weeks. My experience is that it has never has it been cheaper to rent property. An estate told me that rent prices are coming down due to the massive amount of 'stock' that is not being sold by BTLers and they have no alternative but to rent them. For a joke I said to one estate agent that after 'deliberation' I decided to rent for while rather than buy for now. She agreed "why buy now when prices will fall another 20% in the next year or so, you'd be better off renting".

Edited by Oxfordite

Share this post


Link to post
Share on other sites
http://property.timesonline.co.uk/tol/life...icle4352937.ece

No need for rental surgery

The fact that somebody is prepared to take a punt on the market coming back at some stage could be viewed as positive

David Smith

When does bad news become good? On the face of it, the Spanish bank Santander’s knockdown bid for Alliance & Leicester, a stalwart of the UK’s mortgage market, showed what a swathe the credit crunch has carved through the housing sector. Yet the fact that somebody is prepared to take a punt on the market coming back at some stage could be viewed as positive.

The latest survey from the Royal Institution of Chartered Surveyors (Rics), which showed a net 88% of surveyors reporting falling house prices and the average number of sales per surveyor dropping to 15.3 over the latest three months, the lowest on record, also looked like unalloyed bad news. Rics, however, chose to emphasise that price numbers are less negative than they were, that buyer inquiries and agreed sales are falling less rapidly, and that predators are starting to circle in search of bargains.

Rics also found little evidence of forced selling by either home-owners or buy-to-let landlords. A report commissioned by the Association of Residential Letting Agents (Arla) suggests landlords who can stay in the market would be sensible to do so. The report, The Modern UK Housing Market - Origins and Prospects, by Professor Michael Ball of Reading University, notes the rise of the private rented sector from near extinction to a £500 billion asset class in recent years. There are more than 1m landlords.

Ball says that new investment in buy-to-let is indeed likely to fall as credit becomes more difficult to obtain – but, although borrowing costs are rising, a big sell-off is, he believes, “unlikely”, thanks to the strength of rental demand. Potential home-buyers, who were deterred by high house prices and lack of affordability, are now prevented from buying by tougher lending criteria.

What will be the result? “Given rising demand in a context of less supply, rents in many areas are likely to rise quite significantly in the short run, unless the UK economy plunges into a sharp recession,” Ball concludes. “Although it is difficult to predict short-term changes in housing rents, increases of 10%-15% in both 2008 and 2009 may well occur, :lol: outside a relatively limited number of areas with a significant glut of properties.”

Though the report was commissioned by Arla and the National Federation of Property Professionals :lol::lol: , it argues that the private rented sector will stabilise, rather than drag down, the market. What’s good for landlords, of course, may not be such good news for tenants.

That could just represent the forming of a bull trap. "Don't try to catch a falling knife," is a very valid investment mantra.

Share this post


Link to post
Share on other sites
Though the report was commissioned by Arla and the National Federation of Property Professionals

As you highlighted.. says it all really.

Interesting that there is a "Federation of Property Professionals"... makes you wonder how many of their members have any form of professional qualification to justify such a glamorous title. Perhaps "Federation of Property Speculators" might have been more appropriate.

Best of luck to them.. perhaps if they say it enough times it really will come true :rolleyes:

Share this post


Link to post
Share on other sites

Rents are not rising in my neck of the woods.

A house that let 6 months ago for £795 is back on at £825 and there are no takers.

Even if it does let at that price it's £30 more against £795 which is around 4% but the difference is that the agent is now advising prospective tenant's to make offers on the property which he was not doing 6 months ago.

So when it lets it is likely to go at 800 or less.

Share this post


Link to post
Share on other sites
"although borrowing costs are rising, a big sell-off (By BTLers) is, he believes, “unlikely”, thanks to the strength of rental demand. Potential home-buyers, who were deterred by high house prices and lack of affordability, are now prevented from buying by tougher lending criteria.

Alot of BTLs didn't do their sums and the rents are not covering the mortgage. There is a bit difference between what renters can afford and what BTLs pay for their mortgage. Hence why Renters are waiting for Huge Price Drops to bring them back to affordability.

FTBs havn't suddenly disappered they wern't in the market prior to CREDIT CRUNCH, the experts are embarrassed by the BTL collapse and trying to disguise the problem , it was the BTL market buying up everything at insane prices and creating the biggest property BUBBLE since time began .

You only had to watch all the 40 + brigade on TV at "Under The Hammer" who were driving up the prices . Its the BTL bubble that has disappered since the CREDIT CRUNCH creating the huge vacuum. Its the BTL brigade who are bricking in their pants now.

FTBs arn't despearate for mortgages, they are desperate for HUGE PROPERTY PRICE REDUCTIONS. Roll on 35% drops and the rest restoring property back to normality and affordability.

Share this post


Link to post
Share on other sites

This is that old demand delusion thing again

If a landlord buys a property instead of an Owner-Occupier (who is still looking for somewhere to live), the supply of rentable properties goes up by one, the demand goes up by one, the net effect on supply/ demand is zero

Housing benefit rules will put a floor on rental income. Unemployment, population outflow and the reversal of the trend towards single/couple person households will all put downward pressure on rents towards that floor.

Share this post


Link to post
Share on other sites
Housing benefit rules will put a floor on rental income. Unemployment, population outflow and the reversal of the trend towards single/couple person households will all put downward pressure on rents towards that floor.

in my neck of the woods, the housing benefit people have a max payment of £380.

the shortfall is expected tocome from other benefits. its crazy as the only thing you can get for £380 is a bedsit.

when unemployment rises and working family men come out of work. last time they lost the home and went to live in a 3 bed council house.

where are they going to go now ? the maximum rent paid is still £380.???

none of this adds up, so it should be very interesting how it plays out.

Share this post


Link to post
Share on other sites
Here's the link to the report on the ARLA site [PDF, ~1.28MB]

http://www.arla.co.uk/news/ARLA_Rental_Report_20081.pdf

Housing Market – Origins and Prospects.

Part 1: Private Rented Housing.

Prof. Michael Ball, Henley Business School, U. of Reading.

July 2008

Cheers.

Nice to see they are still ramping it up. How many BTL's does he have ?

Edited by Ash4781

Share this post


Link to post
Share on other sites
Here's the link to the report on the ARLA site [PDF, ~1.28MB]

Hey Spline, do you know where can I get historic info on BoE mortgage approvals?

I've spent quite a bit of time looking through their site and can't find any links, any help would be appreciated.

Share this post


Link to post
Share on other sites
You only had to watch all the 40 + brigade on TV at "Under The Hammer" who were driving up the prices .

it was obvious to see what was going on in the uk when you cast an eye over the auction crowds.

as you say, many a leather jacketed part time dad investor. nimby couple or asian buying group.

i never saw a normal couple in their 20s or 20s win anything.

it was all about 'investing'

Share this post


Link to post
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...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 399 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.