Thursday, March 10, 2011

Houseladder; the purveyor of all that is sensational and unsubstantiated.

Rents 'are likely to escalate'

Question: "If your landlord increased your rent; at what point would you tell him/her to jog-on?" 'Rents are expected to rise over the coming year, new research has suggested. Tenants are likely to see their rents rise over the coming year, new research has found. The study, carried out by Rightmove, showed that more than half of those leasing property (53 per cent) expect the costs of doing so will increase in the next 12 months. Only four per cent of those questioned predicted that the payments will be reduced. More than a third forecast that their rents will inflate by up to ten per cent, while 16 per cent anticipate the sums will rise by double-digit figures.

Posted by sibley's b'stard child @ 10:27 AM (1529 views)
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8 thoughts on “Houseladder; the purveyor of all that is sensational and unsubstantiated.

  • Sib’s – I’ve read dozens of articles recently regarding rising rents and suspect that in reality only modest increases will be realistically achievable – as with purchasing a property surely the “affordability factor” will win the day? Household budgets are under pressure due to rising costs (fuel etc..) which are not matched at present by wage increases, so double digit increases seem way out of line to me with what the market will stand.

    I’m sure from memory MW has some longstanding stats on this subject.

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  • the number cruncher says:

    Rents are subject to supply and demand, that’s effective demand – which is peoples (or governments in regard to Housing benefit) ability to pay. Both are going down in the medium to long term. I am unsure as the the supply side but I assume it will remain static. There may be blips in people wanting to rent due to the Mexican stand-off we have between buyers and seller, but it will pass.

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  • sibley's b'stard child says:

    Absolutely Jack (unless i’m proven otherwise), I also believe it’s BTL-fantasy nonsense. I must admit, I was filled with trepidation around February 1st as that was my year’s anniversary (so to speak) but i’m happy to report it passed without incidence. The main driver behind this ‘rents rising’ meme seems to be LSL. But, they wouldn’t have a VI in that of course.

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  • When it comes to renting, a lot of people will choose based on what they are prepared to pay as well as what they are able to pay. When buying, a lot of people will automatically stretch themselves to the max so they get the best possible home, whereas renting, a lot will see it as temporary and so will be far more willing to live somewhere smaller or less desirable than if they were buying, simply because they can save more towards their deposit. Anything is only ever worth what someone is prepared to pay for it.

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  • This would be genuinely inflationary and the sort of thing which might force IRs up. In which case it would be rather self defeating for all those landlords with mortgages

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  • It’s not in the landlord’s interest to agree a rental contract whichthe tenant is struggling to pay.
    He wants as much certainty that the agreed inflow of rents comes his way

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  • mark wadsworth says:

    Jack C, exactly. As TNC and TT explain, rents are a balancing figure of net income minus essentials (whereby a lot of people consider an annual holiday abroad an essential), so if net income falls and essentials become more expensive, the balancing figure goes down disproportionately.

    In any event, we keep seeing these articles saying “Rents up by 10% but rent arrears up from 10% to 20%”, which sort of proves it.

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  • It’s been years since I’ve had a rent increase during a tenancy and the last place that did impose them worked out at about 4% per annum. I suppose it’s different in London and some of the other hot spots but this article bears no relationship to the market I’ve experienced in my life.

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