Friday, December 17, 2010

Yeah, right.

UK home rental costs at new high, letting agents say

"The average monthly cost of renting a home rose again in November, to a record £692, according to the LSL property index... The survey also found that arrears had risen, with 9.7% of all rents unpaid... Rents had now risen for 10 months in a row, LSL said. However, it said November's rise was mainly due to strong demand for rented property in London, where rents had increased by 1.8% last month. Elsewhere they were now falling - down by 3.1% in eastern England and 2.4% in the East Midlands during November alone. They also dropped by 1.9% in the south-east of England and by 0.6% in the north-west of England."

Posted by mark wadsworth @ 11:38 AM (2753 views)
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19 thoughts on “Yeah, right.

  • I have been waiting for this one. Stagflation, drat,drat,drat!!!

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  • Are there any other surveys, or is LSL the only company providing these stats? Not that I have any reason to doubt them, but aren’t they talking their own book?

    Anecdotally I have heard that London rents are up; but by how much I don’t know. Also I’d really like to understand the reasons. Have London wages increased massively? Has there been a massive population influx into London in the last year? Have lots of landlords sold up? Have the rent-a-room brigade stopped taking on lodgers, because thanks to 0% interest rates they no longer need the extra income?

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  • sibley's b'stard child says:

    “The survey also found that arrears had risen, with 9.7% of all rents unpaid”

    That’s odd, it’s almost as if there’s a correlation between rising rents and tenant’s inability to pay. Strange.

    Drewster, I really don’t know. I can see the article argues that a shortage of BTL has driven-up rents but why the sudden in spike in demand for rental property – that’s what isn’t contextualised. I have heard it purported that LLs – in anticipation of the LHA cuts – are getting ahead of the curve and hiking up rents, so to speak.

    Certainly, i’ve just performed a quick search on Rightmove and now there are no equivalent properties in my area available for rent at my current rate (£800 pcm). The cheapest property is now £825, so perhaps the article holds water in that sense. It’s the ‘why’ that alludes me also.

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  • SBC – I might be stating the blindingly obvious here, but isn’t the lack of mortgage availability forcing more people to rent?

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  • It would be interesting to know how many sellers are immediately buying again and how many are deciding to rent. Can this information be deduced from any of the stats that are made available?

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  • sibley's b'stard child says:

    RnR, yes, I didn’t state the obvious which is a little remiss of me. However, mortgage scarcity is hardly a recent phenomenon so i’m not sure if that would account for the recent rental rises. A graph I would be interested to see is the number of mortgage products (or cheapness of credit, for want of better English) available and the correlation with rental yields.

    Perhaps Nomad has the answer insomuch new entrants to the rental market are coming from STRs who can’t or won’t buy?

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  • Drewster, “Are there any other surveys” Yes, findaproperty do one quarterly. The latest available is old now at Q3 and so we have to wait til Jan.

    Why London rent rises compared to rest of UK? My guess is RPI inflation of 4.7% and pretty good employment situation with heavy weighting to private employment and exporting service companies including financial services enjoying the cheap pound.

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  • Ahh, the BBC’s increasingly common journalism by numbers.

    Skip to 3m18s

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  • Paul i am outraged with the BBC…. they have stopped “myplayer” working on my android… they are obviously biased towards the iphone market… typical Iphone = baby boomers, Android = younger generation…

    B’stards!!

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  • they are obviously biased towards the iphone market… typical Iphone = baby boomers, Android = younger generation…

    Yeah. I’m really not sure about that.

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  • the number cruncher says:

    techiman @8

    As a fellow android user I have solved that problem by reinstalling an earlier version of mplayer – you can get one from a number of placers – I got mine by bittorrent, do not use the market place (if you are not technical you will need a application installer (freely available from the marketplace) and to copy the instillation file to your flash memory card

    All the best

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  • the number cruncher says:

    smart phone = android
    dumb phone = iphone

    my android does things only iphone owners can dream of and its much cheaper.

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  • TNC – this is a bit weird. I definitely didnt update the version (i read what the author said on the market place) and then it didnt work at all. Last night it was resurrected but only with streaming bbc. [my understanding is that had i upgraded it would have been with streaming bbc/itv/c4/c5]….

    All very odd!!!

    “smart phone = android
    dumb phone = iphone” – paul now do you see the correlation ? 😉

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  • general congreve says:

    @13 – In response to your earlier post about my strike price (posted here as the article has now moved of the main board and I feel your post warrants a response):

    I would have loved to get in earlier techie, only thing was the cash I used was tied up in property. Mind you, I sold that property at peak of the market in August 2007, making a 54% profit, I then ploughed that into an Icesave account at 6% for about 18 months, while I started to look into the financial crisis. A day before Icesave collapsed I pulled all my money out and bought gold. So, taking it all in context from my starting point in 2002, I haven’t faired to badly and my timing been pretty much on the money, IMO.

    I would have faired a little better to sell my property in 2005 (the peak in property versus gold) and invested in gold then, but I was working abroad at the time and the property was rented out to tenants, so I didn’t have that flexibility, or the knowledge of the markets at that time to be fair, to do that.

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  • A good data source on private sector rents is the the Valuation Office Agency (VOA) which publishes Local reference Rents (LRRs) for each so-called Broad Housing Market Area in the Country. These LRRs are used to calculate Housing Benefit. They are based on a large sample of advertised rental properties and represent the mid point between lowest and highest price after outliers have been removed.
    If you compare data from 31st Ocober 2010 with data from 31st October 2009 then you’ll get a pretty good idea of YoY change.
    I’d graph it for you if I knew how to imbed in http.

    http://www.voa.gov.uk/publications/localrefrents/

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  • e.g. Plymouth: LRR for self-contained 1, 2, 3, and 4 room units (crude average across all 4 sizes):
    October 2009: £ 109.65 pw
    October 2010: £ 113.52 pw
    YoY cvhange: + 3.5%

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  • Here’s a stab at a national measurement;
    LRR for 3 room units: crude average across all Broad Housing Market areas
    October 2009: £ 140.80 pw
    October 2010: £ 141.42 pw
    YoY change: + 0.4 %

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  • @ontheotherhand,
    Could you expand on that further? (Perhaps in another post, since this one will fall off the top 10 soon.) I just don’t see the employment conditions in London being *that* much better than the rest of the UK.

    @rantnrave,
    I could believe this, but are there any articles to provide evidence? (Again feel free to post them as a new article)

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