Thursday, August 31, 2006

Even renting is getting more expensive…

Rent rises hit high as tenant demand stays strong

The rise in rents for the quarter to July was the strongest in the survey’s history, almost four times the long run average. Surveyors report that immigration from EU accession countries (government estimates stand at 427 095 since EU expansion) has put further upward pressure on rents. RICS spokesperson Jeremy Leaf commented: “Economic prosperity and population migration have increased rental demand pushing up rents, making conditions better for property investors. "However, first time buyers will find it hard to enter the housing market with higher rents making it difficult to save sufficient sums for a deposit.”

Posted by little professor @ 11:47 PM (16 views)
Please complete the required fields.



22 thoughts on “Even renting is getting more expensive…

  • Its time for the wannabe FTB’s to go back to the hotel Mum & Dad if possible. Bite the bullet, go home, save a fortune on rent and then come back with a huge wedge of cash as a deposit for your first home. If your lucky and enough others do the same you might even find a few BTL landlords selling up due to having no tennents, at the very least it might put off a few wannabe BTL’s.

    Gav

    Reply
    Please complete the required fields.



  • this isnt too bad i think. more FTBers pushed out will eventually come back to bite the market in the ass. Also, the tide of migrant workers wont support the market forever. Contrary to what the Daily Mail or telegraph would have us believe, we dont live in the garden of eden where hordes of migrants wish to settle for ever. From
    what I have seen and read else where, most workers from Eastern Europe come to do what are low paid jobs by our standards before going back home with the money they have saved. becasue they are low paid jobs, migrant workers will only be able to afford so much in rent. If rents get too high they cant save and it will not be worth their while. Or they will try to rent from cheaper landlords who got into btl when it was a good investment a few years ago, making BTL unworkable for the johnny come latelys. Such uncreases in rent only go to show that many BTLers are struggling to make ends meet.

    lets hope this news puts a bit more pressure on the BOE in the next couple of weeks.

    BFS

    Reply
    Please complete the required fields.



  • This is bull week in the press. Looks like more interest rate rises are on the way as Gordans economic miricale continues (the cycle of consumers borrowing more and more to generate growth). I am more than ever convinced it will end in tears as as US led world recession and world credit tightening starts to bite.

    Reply
    Please complete the required fields.



  • What rent rise is that? Here in Cornwall where we have had the highest HPI in the country the rents are still the same as they were over a year ago. I suspect this article is aimed at bolstering the BTL sector

    Reply
    Please complete the required fields.



  • RICS have their own little way of presenting data. What it is actually saying is:

    ‘a slight upward trend, slightly more than the last time we asked, but over a third of our respondents are seeing either no increase or a fall’

    – Not much to report, really!

    Reply
    Please complete the required fields.



  • surfgathino
    I also live in cornwall and recently had to move, rents have increased dramatically, we had a hard time finding a place for the rent we could afford (and still had to pay more than we did previously). Since we have moved rents seem to have risen again I cannot find anything of a similar type to our property below our current rent.

    Reply
    Please complete the required fields.



  • Wave of immigrants will soon stop anyway…..only the UK and (I think Swedan) agreed to accepts immigration from the new Eastern members immeadiately on accession. Soon (next year I thnk) all other EU members will have to accept them (following the end of the transition arrangements) and that will lead to considerably fewer coming to the UK, especially considering that places like Germany are closer to Poland, have better pay, better working conditions (and despite what has been reported) a fundamentally much stronger economy with low levels of debt, a healthy manufcaturing, the worlds largest exporter and (relative the the UK) much cheaper housing……

    Reply
    Please complete the required fields.



  • This is pure bullshit. Its the RICS trying to raise rents by reporting rises in rents.

    I pay the same rent now as I did three years ago. I recently got a new job in London, and the estate agent negotiated 40 quid a week off the rent _without me even asking for a reduction_ for the coming year. There is phenomenal downward pressure on rents at the moment, and RICS is trying to reverse that trend.

    Reply
    Please complete the required fields.



  • Sorry to butt in again but of course this statement from the article:

    “30% more chartered surveyors reported a rise in rental levels”

    has two possible meanings of course …

    Reply
    Please complete the required fields.



  • This is what I dont get about the “your better off renting argument”.

    Surely if rents rise over the years you will be far worse off than paying a mortgage at a fix rate over 25 years.

    Renting maybe cheaper than buying a house for now, but what about next year, or the year after?

    Reply
    Please complete the required fields.



  • I’ve had no rent rise for 3 years either. I think if you prove a good tenent, landlords are more likely to hang on to you even if it means less income in the short term. I’ve heard of one local case last week where a portuguese tenant ripped out all the fireplaces in their rented property, sold them to local reclamation yards and then bogged off back to Portugal – can’t see the police intervening there … they are too busy trying to figure out how many terrorists we have wandering around our streets.

    Reply
    Please complete the required fields.



  • Bricksandmortarmyarse says:

    I agree – my rent’s stayed the same for the past four years. The agent did try and raise it a couple of times – all it took was a quick call to the landlord and we didn’t have to pay any more.

    Reply
    Please complete the required fields.



  • George Monsoon says:

    My rent was dropped by 50 quid a month last year… I did not even request the drop!

    Reply
    Please complete the required fields.



  • C'mon Correction says:

    Our rent has been £450 (for a very large 2 bed flat) a calender month for the last few years, never been increased since we moved in. In fact it’s the same as rents were 8 years ago here in South Wales not even taking inflation into account. Yet ftb’s are still falling over myselves to buy and then pay £600+ in interest only on a shoebox (let alone maintenance, insurance etc)? No logic out there at the moment?!

    Reply
    Please complete the required fields.



  • Uncle Chris,

    I think there may be as many as 256 million terrorists walking our streets. I went through customs reecntly and there were so many posters on the walls with slogans like “TERRORISTS COULD BE LIVING NEXT DOOR TO YOU!!”” and other such stupidly paranoia inducing crap.

    In this climate of fear, the only certain thing in life is that house prices will continue rising and rising.

    (=:

    Reply
    Please complete the required fields.



  • Purposely focusing the citizenry on “suspecting” their neighbor is an unbelievable mentality. Here’s an example of how tantalizing it is for people to get hostile with the unsuspecting……

    Our town had a “mystery neighbor” move into a long-deserted mansion property without making a point to introduce himself to the nosey townspeople. He instantly aroused the entire town’s suspicions. Within days of his arrival the curious took turns peering over the wall and saw this very short guy with a bald head waddling around and around the lake, up to his eyebrows in the grass and rushes. It looked like he must be about three feet tall! So the whole place lit up with speculation about why and what he was “hiding”. People took turns spying and he soon became known as “the crazy bald-headed midget. There was an actual schedule set up to keep an eye on him. There were even petitions started to try to get rid of him.

    One afternoon he suddenly plunged into the lake and disappeared and the people spying over the wall, suspecting a demented midget suicide, rang hysterically for emergency services. When the ambulance arrived, paramedics discovered that the guy was a scientist. He had been studying a rare breed of ducks that were having difficulty raising their young. The scientist wore a contraption that held him in a “duck like” squatted position. In this get-up he followed the mother duck and babies through the rushes, imitating their behavior, and trying to determine what could be causing the ducklings’ early demise. The babies had grown enough to begin swimming and he followed them into shallow end of the pond to observe — all in pursuit of a worthy cause. This dedicated and reclusive environmentalist was shocked to learn, on the other hand, that there was half a town just over the wall in a near state of riot and anxious to be rid of him.

    Reply
    Please complete the required fields.



  • Here’s a thought – I’ve posted this once on another site – and it’s far more likely to get a rise out of people than terrorist threats (it also has nothing to do with HPC).

    Firstly to point out no I’m not one and neither is the mate from down the pub who pointed the following out.

    Paeodophiles. Yes, you heard right. If you are unfortunate to be afflicted with most other social problems, alcoholism, a theiving heroin addiction, violent criminal tendencies, you can get therapy. Where does a paedophile go to get help? And will they get there in time before being lynched by angry neighbours waving placards reading “burn in hell”?

    I’m fairly convinced that mostly all we have to fear is fear itself, and that applies to paedophiles and terrorists and street muggers. Just a thought.

    Reply
    Please complete the required fields.



  • Paul said…I think that is courageous to point out. The way we can most harm ourselves is to force everybody “different” to have some private hell to live in alone where they can’t get help and are afraid to admit they’ve got a problem. There are endless cycles of abuse in families because nobody wants to say things aren’t right or they can’t cope. They’re afraid of being condemned. What therapists call “functional alcoholics” are notoriously hurting people who are supported by a “hush-hush” spouse or family — who each and all are required to stay silent as a pact of fidelity with the ill person. After all — the paycheck is still coming home at the end of the week; why rock the boat. It may not be about house prices, but you’ve hit the nail on the head. The more you shut down the culture and try to control by rejection, stigma and silence, the worse it will become.

    Look where these so-called politically and religiously motivated terrorists are coming from! Radical Muslims? Nonsense. There is no such thing. It’s an oxymoron. As soon as you become “radical” you aren’t a Muslim anymore. Read the Koran and it says so in large bold print. Mohammad was a man of total peace who swore all his followers to respect Jews, Christians, and anybody else who crossed their path. No one had a right to fight unless they were attacked. This is all an elaborate excuse to mask feelings of rejection by people who don’t feel respected and appreciated and believe that they have no future. Whether they’re in Palestine or Lebanon or Birmingham. I know people of all religions, just about every one you can name. And they all want the same things: a home, food for their family, education for their children, acceptance from their neighbors, and a couple tickets to the ball game. The same feelings as everybody that writes in on this website and says “What do I do now????” The difference is that we are articulated and we respect each other. We people of the world are so much more alike than different. Why make such a big deal of the difference and not of the similarities?

    Reply
    Please complete the required fields.



  • Back to HPC… We pay less in rent than we did 11 years ago for a house a quarter of a mile away. It was a slightly bigger place, but when you consider that prices have trebled and that house could probably rent today at max 1.5 times what it was 11 years ago, you can see the sums just don’t add up.

    The odd thing is that, when we were renting all those years ago (at about the bottom of the market swing) we discussed BTL as a business prospect and looked at a number of properties and, even then, concluded that it was not viable in the longer term, unless you could rely on HPI, which after a long slump, seemed unlikely. As a chartered accountant, I am both blessed with an understanding of the finances involved and hampered by a tendency towards caution – clearly on that occasion, over-caution!

    However, from what I’ve seen of client tax returns in the period since then, it is clear that those who have had to borrow most of the purchase price have struggled to show much in the way of a profit on rentals – and those who bought in the last few years have shown big losses. In fact, the only ones to really see decent profits from renting are those who have student houses, but that is very much a business, involving time and effort – you don’t just sit back and wait for the rent to roll in.

    Of course, what has made a difference is that my projections, 10 years or so ago, were based on long-term mortgage interest rates of 8% – what we couldn’t know then was that rates would fall so low and stay so low for so long. Indeed, if rates were to rise overnight to the level they were in 1996, HPC would be assured – the base rate then was around 6%, widely believed then to be the low point.

    I readily own up to being too cautious then – had we taken the plunge, we could have made a small fortune in capital growth in the period since – assuming we had the nerve to hang onto them as the bubble expanded… However, with house prices now three times what they were 10 years ago, mortgage rates creeping back towards those levels and rents barely more than they were, only a complete idiot would go into BTL right now.

    And still the fools rush in. People are now so foolish as to subsidise the rents, on the basis that capital growth will cover their losses in the longer term. What they don’t realise is that the capital growth has been achieved because home-owners are prepared to pay more to buy property, due to low interest rates, relaxed lending and a belief in HPI. However, none of this applies to renters, who clearly are not going to be prepared to pay more. So once the market cools, things are going to get extremely nasty for BTL landlords who bought in the last few years. And if mortgage rates do rise to 8%, and they could very well do so, don’t be surprised to see house prices at 1.5 times their mid-nineties levels, ie about half their present level.

    Reply
    Please complete the required fields.



  • Really

    I keep asking my landlord if he is still happy with the level of rent I am paying no problems he says, it has not increased for 2 years, nice guy too…

    Reply
    Please complete the required fields.



  • Watingnwatching says:

    It seems pretty simple really. Those old time landlords who put far less investment into their properties and who by now own much more will not increase prices in the fear of losing good tenants. This is even the case when faced with increasing interest as they are not stung as much as the new BTLer. I think that as rates rise we as tenants we will have to vet the landlord in order to see if he is likely to rise rents to subsidies a bad investments on his part. I am not sure i would even pay a rent rise due to interest rate rises for if I don’t own the house i certainly don’t own the risk so i am not going to fund it.

    over and out

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>