Thursday, October 13, 2011

Time for a Rent Price Crash too

Private rents in England unaffordable, says Shelter

Private rents are now unaffordable in 55% of local authorities in England, the housing charity Shelter has said. Homes in these areas cost more than 35% of median average local take-home pay. Chief executive Campbell Robb said: "We have become depressingly familiar with first-time buyers being priced out of the housing market, but the impact of unaffordable rents is more dramatic. "With no cheaper alternative, ordinary people are forced to cut their spending on essentials like food and heating, or uproot and move away from jobs, schools and families." Housing Minister Grant Shapps said the government recognised the importance of private landlords in providing homes.

Posted by little professor @ 08:08 AM (2534 views)
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22 thoughts on “Time for a Rent Price Crash too

  • sibley's b'stard child says:

    What is this red tape that Shapps alludes to?

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  • The regulation of tenants and landlords that he scrapped.

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  • Sorry! – that should say regulation of letting agents and landlords. Too early in the morning.

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  • In my opinion there should be special taxes on second homes, and taxes on buy 2 lets. This would force investors to sell as it wouldn’t be so profitable. Which would then drive house prices down, and makes homes more affordable.

    “the government recognised the importance of private landlords in providing homes…” i.e. to drive up house prices so they become unaffordable to the majority… and then to screw people with extortionate rents. Brilliant service, how generous of them.

    As it is private landlords even get tax benefits based on their mortgage. The system is so skewed in their favour.

    Of course the government just wants to keep the housing bubble inflated, at whatever price.

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  • sibley's b'stard child says:

    Hmm, thanks Phd, unless i’m missing the point I don’t see how scrapping those proposals (to protect tenants) would help constrain rents.

    Still, saw this interesting nugget in the Guardian link:

    ‘There are 1 million landlords in England, nearly three-quarters of which are individuals who may be renting a single room out, according to government figures.’

    Unplannedlords-a-go-go.

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  • A few notable comments from the article:

    “Instead of talking of land-taxing peoples’ homes we should tax all lettings very highly and use the money to build housing. ”

    + Lots of commentators saying that we need to move to rent controls, longer tenancy contracts along with stopping the landlord selling you home from beneath your feet.

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  • Supply & demand, simples.

    That was part of the reason why I got a mortgage instead of renting, because it was cheaper overall; it also provides stability and I end up with an asset when I have paid off the mortgage. Obviously, it helps to have a stable private sector job too.

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  • tenyearstogetmymoneyback says:

    It would help if the alternatives for keeping your money weren’t so rubbish.

    Next week we have a meeting with her IFA to discuss what to do with my Mothers house
    now she has moved to a care home.

    House is “worth” about £300K. I would guess it would rent for about £800 a month
    giving a return of 3.2% before costs.

    Will be interested in seeing what alternatives he suggests especially as the house is
    3 hours drive from me so I couldn’t keep an eye on it.

    :- Duncan

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  • Quite Sibs. Cynical old me thinks that he wants to keep landlord’s costs down to protect yields and therefore house prices.

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  • As I’ve said for years – renting is not more efficient than buying, so if a property is too expensive to buy, it will also be too expensive to rent..

    ..unless of course, rents are subsidised by landlords chasing capital gains – but that was always unsustainable.

    The important thing now is to reduce the amount the taxpayer spends subsidising rents – lower rents will mean insufficient returns for landlords, leading to lower property values..

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  • @tenyearstogetmymoneyback – the IFA will need a specific licence to advise on Long Term care (CF8 qualification currently offered by the Chartered Institute of Insurers or IFS School of Finance – Certificate in Long-Term Care Insurance (CeLTCI) – make sure he has it !

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  • so houses are unaffordable, rents are unaffordable, food is getting too expensive, fuel is horrendous

    where does that leave the british people? will if force a crash or not?

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  • OK, so economy nose diving, but we must maintain low IR’s to support the housing market when in fact by increasing IR’s we would free up more cash in our economy by reducing the cost of housing.

    Simples.

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  • mark wadsworth says:

    I agree with all the comments above. It’s all so depressing. For sure, Shelter have their own axe to grind, shroud to wave etc, but Shapps and his ilk (and their Labour predecessors) are doing this deliberately – govt policy is geared up to making rents as high as possible.

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  • It’s called The Miracle Economy.

    braindeed gets it. Simples!

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  • 12. mark,

    It’s called brinkmanship and keeping the host bearly alive.

    Survival of the fattest, in this case mate.

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  • Housing buying / owning bled dry, next: lets get the renters money, whos after that……old folks bump them off and take what they had?
    Or is that already happing?
    We accept shoddy service, shoddy houses, poor excuses or out right lies, poor roads, poor soldiers, corrupt or immoral government, too expensive housing and now rent…

    We as a nation can say NO, enough. Its our country, its our society. Lets get a back bone people.
    But I forget we all moan but take no action, and its a dog eat dog nation now. Easy to control a person whos scared….

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  • I happened to catch a response, to this, from Grant Shapps on a 10 am Radio 2 news bulletin. With the aid of iplayer, this is the transcript:-

    Quote

    I totally..sort of..accept the premise that rents are too high..but that house prices are too high. And the answer, of course, is to build more homes. There is no other simple solution to this and, er, that’s what we’re embarking on doing..so, in this last year, we’ve built more affordable homes to rent (emphasised) than anytime since 1995/1996, for example.

    End Quote

    Make of that what you will.

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  • this country is a sh^thole when will the government ever learn it is about quality of life not being a slave to having a cave to live in

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  • tenyearstogetmymoneyback says:

    Jack C said “the IFA will need a specific licence to advise on Long Term care”

    Thanks.

    I was aware of that. The person we normally deal with is not qualified so we are seeing the head of the company who
    has the required qualifications.

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