Wednesday, June 25, 2008

OFFICIAL Press Release from ARLA: Rents are static

No Soaring Rents as Supply and Demand Levels Come Into Balance Quarterly ARLA Survey Shows

Average weighted rents for houses are down by 7% and for flats by 9%. ARLA says the main cause is the developments of new blocks of two-bedroomed flats coming on-stream. The average capital asset values of rented houses and flats has also fallen [by 3.1%]. 17% of all tenants are immigrants.

Posted by drewster @ 09:11 PM (1303 views)
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9 thoughts on “OFFICIAL Press Release from ARLA: Rents are static

  • Note: the 3.1% overall capital value fall is just a crude average. The press release doesn’t give the overall average, but the breakdown for capital value falls (not rents) is as follows:

    Houses in prime Central London: down 2.4%
    Houses in rest of London & SE: down 1%
    Houses in rest of the UK: down 5.1%
    Flats in prime central London: down 3%
    Flats in rest of London & SE: up 0.9%
    Flats in rest of the UK: down 8.1%
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  • Nice find Drewster,some proper stats instead of the propaganda pumped out by BTL masters of spin,Paragon.I wonder if this will be a story in the Times tommorow?

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  • japanese uncle says:

    To be honest, I think I may humbly mention that my predictions about the UK economy for the past 18 months or so proved right, in nearly every respect. This is simply because the UK is almost precisely following the same path as Japan did some 19 years ago, about which my memory is still vivid. On this basis, I must say that the rents in Japan has been stagnated to this day, ie rents in Tokyo today are generally cheaper than 20 years ago. Circa 2000, rents were considerably cheaper than the 1989 level, probably by 15% or 20%. I can easily predict the same thing in the UK, in view of the imminent recession in which we will see surge of unemployment, record-breaking business failures, etc, besides the tens of thousands of Polish workers who are likely to make reasonable decisions to go home, as remaining in UK is not economically viable. When the banks call the loans they have pushed to the consumers like mad dogs during the past two decades, which amounts to 1.4 trillion, while they will provide no new loans basically, unless they secure very good collateral (which will be non-existent in the very near future). What would happen. Prices would have to come down to the level affordable by the millions. Surely deflation will take over as money that people can use at their will disappear from the economy, except in the tiny segment of the market for the very well-offs. Hundreds of thousands of the young or low-income British workers will have to go back to the old familiar bed-sits, which is already happening in London, let alone flood of the hundreds of thousands of newly built urban ‘luxury’ flats in each and every major city, where supply will far outstrip (effective –, make not mistakes) demand.

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  • JU: Thanks for that insight. I agree 100%.

    @sold out – It wasn’t really my find, I just dug out the original source of “who stole my pension”‘s earlier article. It dates back to 9th June so it won’t be in tomorrow’s papers.

    Here’s how it was covered in the media on the 9th (with thanks to Google News):

    BBC News: ‘Strong demand’ for homes to rent
    No mention of the 7% and 9% falls. “Capital Economics, a London-based consultancy, forecast that rents would rise by between 10% and 11% over the next two years.”

    Independent: Rental market booms as house prices slide
    The 7% and 9% falls are buried in the second-last paragraph. At the top of the article they quote Paragon’s misleading boom figures.

    And that’s it from the mainstream media! No mention in the Times, Telegraph, Guardian. Even Assetz managed to report it more accurately than the BBC:
    Assetz: Fall and rise in the rental sector
    “The latest survey is more ambiguous in its findings…” — That’s pretty bearish by Assetz’ standards.

    So WTF is going on at the Times’ property department for them to be so consistently bullish? Have they been smoking crack? Are they too proud to admit that they’re badly wrong? Are they under government orders to “not talk us into a recession”? Personally I think there’s some underlying psychological reasoning: fear of admitting failure, unwillingness to face reality, all those sorts of things.

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  • top marks.. brewster..

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  • landofconfusion says:

    > Houses in rest of London & SE: down 1%
    > Flats in rest of London & SE: up 0.9%

    I can believe that. 🙁

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  • A year or so back, ARLA was a blinkered cheerleader for the BTL camp, but now they have seem to have changed..

    They appear to be reinventing themselves as a source of serious information; belatedly applaudable, I suppose!

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  • ontheotherhand says:

    “17% of all tenants are immigrants”
    Do you think this means that if UK recession plus inflation leads to many economic migrants returning home, there will be lower overall demand? I suppose immigrants tend to select a certain class of property and an argument would be this won’t affect the other types. However, with new build flats in oversupply, immigrant properties becoming empty, and prime London falling as City firms generally shed workers including relocated executives, I don’t see what type of rented property will emerge unscathed.

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