Wednesday, June 25, 2008

VI renting spin from The Times

First-time buyers trapped by rent rises

"Monthly bills for a rented home have risen by an average 11.7 per cent across Britain in the past year, according to research from Paragon, a buy-to-let mortgage lender." Hmm ...

Posted by quiet guy @ 08:23 AM (1448 views)
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16 thoughts on “VI renting spin from The Times

  • So, as rents become unaffordable they will stop rising… so simple it is supply and demand

    But the sooner Para-gone ends up into the dustbin of history the better!!

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  • Waitingtobuy says:

    Hurford Salvi Carr, an agent in Central London and Docklands, said that rents had been suppressed by a flood of homes that owners had been unable to sell. Hamptons International reported that the supply of homes for rent had jumped 40 per cent since the onset of the credit crunch, and the number of potential tenants had risen 9 per cent.

    Bit of a contradiction to the main story bu11sh!t.

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  • Bit of general renting news/experience from in my area (Birmingham/Coventry). Mean time on market for rented accommodation is/was about 5 days before we secured somewhere. One morning we were shown around 3 properties, 2 of which had been let by the time we got back to the office. Basically, *nobody* wants to buy at the moment and so any decent rented accommodation is being snapped up.

    Not necessarily seen people paying a lot more for rents yet, but it is a case of supply and demand. I have no idea about supply, but there’s certainly a lot of demand. So long as renting remains substantially cheaper than buying (i.e. house prices are crashing) this isn’t likely to change.

    Thing is, when HPC looks like it’s levelling out all the FTB’s with phat lootz deposits will go and buy somewhere, the rental market will tank, and possibly kick off another house price drop (not crash?) because the landlords can’t get any tenants.

    Views, suggestions, criticisms or comments (insightful or otherwise) welcomed.

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  • Another feeble article based on (Zombie) Paragon PR.

    Taking a quick look at the Paragon site, they are essentially closed to new business.

    Their “survey” is based on last 3 months mortgage applications, after survery. It only proves they have tightened up the lending criteria, and their borrowers have to put up a more viable case. Volumes? I don’t think so.

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  • letthemfall says:

    Times articles on this subject are nearly all 3rd rate journalism. Some contradictory stuff here – flat rents up but an oversupply; rents in London suppressed by a flood of unsold homes. There may be some local increases in rents for houses as more people opt to rent, but mortgage rates are increasing and prices falling. Hardly a boost for housing investment. As I’ve said before, I suspect all these Times property journalists are heavily invested in BTL.

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  • One of the comments after this article raised an interesting point. This ‘increase in rent’ might come calculating the rent as a proportion of the house price (i.e. the yield).

    Therefore, if house prices come down, and rents stay roughly the same (and they do tend to be more stable), then the rent as a percentage increases. Hey presto! Instant VI headline fodder – the ‘rents are increasing’ (even though they are not).

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  • The VI’s are getting very nervous about the meltdown of BTL are they not! From experience and speaking to an EA who does lettings he is not seeing rises at all.

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  • Rent rises/falls will be localised as some areas have high density BTL flats and other areas have relatively few. Overall, I doubt rent rises will keep pace with inflation. Result: BTL landlords out of pocket, plus dodo property portfolios. Not a nice place to be.

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  • I think one of the point that is always missed is that rental rises only effect newly let flats. most people I know renting in london have been in the same place for a while and not had any rent increases for years. so if some rents go up 10% that is only the % of flat being re-let.

    I just re-rented recently and got a pretty good deal. the guy downstairs has had no rent increases for 5 years and ours is only 6.6% more than his!!!

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  • The_uk_is_sinking says:

    What rubbish, my rent was frozen when I renewed my tenancy.

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  • Guys, ask yourself a question.. People will just move back home and live with their parents. Low Rent, seeing Mummy & Daddy everyday, no energy bills, cheap grub. Higher QOL (And you can escape at the weekend) or High Rent to a private landlord and Lower QOL, you have your independence, but that’s it.

    Economies of scale, it is not unheard of for families to come together in times of hardship, and this is what will happen. Families will make sacrifices “Dunkirk Spirit” and the sorry B2Ler & EAs will have to swing.

    It now makes sense why the family structure has been attacked and eroded over the many years by both Labour & the Conservatives, but family, partnership, cooperation, will become “vogue” again, and in a big way.

    I think it is called “pricking the conscience” or “reality check” and “forgiveness”.

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  • mark wadsworth says:

    As a simple matter of fact, rents (in absolute terms) are the most stable factor in the housing market, they tend to rise in line with wages (rent being a normal good). That is a long run observation, and I am not seeking to explain or justify it. For sure, some places see rents rise faster and others slower, but there are no big spikes or drops to worry about.

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  • Let’s unpick one of the claims in this article. According to these ‘reporters’ the Association of Residential Letting Agents (ARLA) says that almost 40% of agents had more customers than properties to house them in. As it stands this means that for over 60% of agents there was an excess of properties over customers or the two were in balance. And what is a ‘customer’. It could be someone who currently rents but registers with an agent because he thinks there are some good deals around. The same ARLA report is interpreted differently by the BBC, which says that ARLA claim that 39% more agents reported that demand had outstripped supply over the last three months. That’s a completely different claim from the one reported in the Times. The BBC version could mean, at one extreme, that the proportion reporting this had increased from 0% to 39% (assuming they are talking in percentage points)..
    The killer blow comes, however, in the BBC report, which goes on to say “But ARLA said rents were falling as there had been a surge of two-bedroom flats coming on stream”….The ARLA spokesman is quoted – “(This) demolishes the myth of soaring rent levels”.

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  • There don’t seem to be any independently-verifiable statistics on rent levels. There’s no equivalent of the Land Registry, so instead we’re reliant on a bunch of vested interests.

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  • @ icarus #14… exactly..

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  • letthemfall says:

    Just checked this morning with a letting agent. Here in SW Surrey – land of milk and honey, 4X4s, selfish b**tards, etc – rents are increasing at about 3.5% a year, which is a little less than inflation (not the Mickey Mouse figure), with plenty of new lets coming on as house owners can’t believe their dream-home is worth less. According to my local friendly EA, house prices are down 10%, with an awful lot of gazundering (nice people, Surrey people). Let them put that in their BTL pipe, light and insert.

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