Rents Falling - FT

lynzpower

Ive seen the light,

Do you fear that as you put rents up, your chances of not getting the money increase- after all are your tenants finding the same probles as the rest of us for rising prices- fuel/ food costs/ lay offs etc

carolt

lynzpower wrote: »

Funnily enough, as I was wandering around knightsbridge last week, I noted that winkworths were advertising on their to let boards around there that if you take up a rental contract with them - then you get a free IPOD.

Cue irony about FTB not saving deposits having spent it all on IPODs & the like :rolleyes:

Love it - especially the irony that I would have thought 1 day's rent in Knightsbridge would buy you several ipods! If you can afford to rent in knightsbridge, there's something seriously wrong with your budgeting if you can't afford your own ipod!

carolt

This link from the FT has more on the same subject:

http://www.ft.com/cms/s/0/ff5cd45a-5fef-11dd-805e-000077b07658.html?nclick_check=1

Stalled house sales prompt rash of ‘to let’ signs

By Elaine Moore
Published: August 1 2008 18:49 | Last updated: August 1 2008 18:49

Property owners unable to sell their homes are being pushed into the lettings market, but many are finding rents insufficient to meet their mortgage repayments.

Lettings agents said these “accidental landlords” were not only having to top up rental income from their own pockets, but were being forced to pay for renovations and safety checks to meet requirements.

With mortgage approvals at a record low, estate agents said even those sellers who cut asking prices by 20 per cent were still often unable to find a buyer.

“As summer moves on and there are fewer buyers than ever, those sellers who have to move for career or personal reasons are getting more desperate and are listing their properties to let in order to meet mortgage payments,” said Miles Shipside at property website, Rightmove.

This has led to a significant increase in the number of homes with both “to let” and “for sale” signs outside.

“There has been a drift of stock from sales to lettings and a rise in the number of people who list on both,” said Matthew Hobbs, directors of lettings at Savills. Around a third of Savills properties are now dual listed for sale and rent, twice as many as last year.
.......

carolt

And this one:

http://www.guardian.co.uk/money/2008/aug/03/renting

I could have had thousands in rent, but my letting agency let me down

John Battsek was told he could charge £1,300 a week; his flat has been empty all summer. Be warned, says Graham Norwood

• Graham Norwood
• The Observer,
• Sunday August 3 2008

As lessons go, the one that documentary-maker John Battsek learnt about the property market has been an expensive one.

"As lessons go, the one that documentary-maker John Battsek learnt about the property market has been an expensive one.

Battsek - famous for his Oscar-winning 1999 film One Day in September about the Munich Olympics - admits that had he been more diligent when finding a lettings agent to rent out his London flat, he might have earned £5,000 in rent this summer. Instead, he has an empty apartment and is another example of an inexperienced landlord paying the price for failing to research how to let out a property.

Mr Battsek wanted to let his two-bedroom flat in Maida Vale, an affluent area of west London, for six months while working in the US. In early May he approached lettings agency Foxtons, which valued the flat at £1,300 a week.

At that point, Mr Battsek did exactly what a prospective landlord should not do. 'I hold my hands up to this: I was greedy and had no idea whether this was realistic. £1,300 is a ton of money and I needed it. So I said yes.' He was encouraged by a representative of Foxtons lettings department who, he claims, described the local rental market as 'flying' and predicted the flat would let 'in a second'. But then the problems started.

Two days later, after no viewings, Mr Battsek says he was advised by Foxtons to cut the asking rent to £1,100. 'I was upset I had to drop the price before anyone crossed my threshold, but I went along with it,' he says.

He claims the firm was slow at erecting a 'To Let' board, says he was told of only two viewings - both by would-be tenants wanting the flat for one month, not six - and that a string of his calls to the local Foxtons lettings manager went unanswered.
Five weeks later he says he was advised to drop the price further to £900 a week and that the property should be re-marketed as a one-bed flat to attract new viewers.

In the meantime, Mr Battsek asked a rival lettings agency to price his home. The result? A valuation of just £600 a week, less than 50 per cent of the original Foxtons figure. Now he has dropped Foxtons and is seeking another agent.

......"



Almost deserves its own thread, doesn't it?

And £600 a week for a 2 bed flat? Seems like it's still got further to go, to me.....

MissMoneypenny

IveSeenTheLight wrote: »

Rents are still going up in Aberdeen

Property Bee is showing that LLs are not getting their asking price in Aberdeen and are dropping the rents.

WTF?_2

IveSeenTheLight wrote: »

I think the 3.5 ratio is outdated in todays market of multiple income properties.
The 3.5 ratio is one that the banks put in place as the level of risk they were willing to take
I posted before my belief that maybe 4.5 is a more realistic ratio

http://forums.moneysavingexpert.com/showpost.html?p=12872531&postcount=34

3.5 was settled on as it generally allows a margin of safety when it comes to repayment. ie. At that level, the borrower has enough spare cash to allow savings and hence cover repayments for emergencies (or should be saving some cash) and the bank's total exposure is lower.

On what basis are 4.5x loans suddenly sensible? The same rules of risk and disposable cash apply. What factor has now changed that makes a higher loan multiple suitable for the bank and the borrower?

Other than wishful thinking about free and easy credit enabling a perpetual housing boom of course - where housing is a one-way bet and prices only ever go up, innit.

Generali

The problem with loans of larger multiples of joint salaries is what happens if/when you want kids? Potentially, the loan the goes from 4.5x to 9x salary!

lynzpower

At that point, Mr Battsek did exactly what a prospective landlord should not do. 'I hold my hands up to this: I was greedy and had no idea whether this was realistic. £1,300 is a ton of money and I needed it. So I said yes.' He was encouraged by a representative of Foxtons lettings department who, he claims, described the local rental market as 'flying' and predicted the flat would let 'in a second'. But then the problems started.

Two days later, after no viewings, Mr Battsek says he was advised by Foxtons to cut the asking rent to £1,100. 'I was upset I had to drop the price before anyone crossed my threshold, but I went along with it,' he says.

He claims the firm was slow at erecting a 'To Let' board, says he was told of only two viewings - both by would-be tenants wanting the flat for one month, not six - and that a string of his calls to the local Foxtons lettings manager went unanswered.
Five weeks later he says he was advised to drop the price further to £900 a week and that the property should be re-marketed as a one-bed flat to attract new viewers.

1) I take it he has been round maida vale at night. Not being funny, but Im not sure its as premier as OO's in the area like to believe. I used to be a social worker in this area, and the amount of crack use/ youth crime/ hoodie behaviour is staggering. Oh well, as long as the famous people live there then its "select"

2) did he not look in the paper or on gumtree etc. 1500 per week is a ridiculous amount of money for a flat there, my mate rented a 2 bed flat in St Johns wood/ maida vale for 1100 a month exclusive, although that was 18 months ago. Clearly prices have not risen as much as what poor John thought.

carolt

Generali wrote: »

The problem with loans of larger multiples of joint salaries is what happens if/when you want kids? Potentially, the loan the goes from 4.5x to 9x salary!

Quite. Yet a number of people on here (strangely, usually the ones without children) argue that 3.5/4.5 times joint salaries ought to be the norm. The reality is that most couples have children at some point, which involves at least some time off full-time work - only a very small percentage of mothers of pre-school children work full-time. And part-time work pays relatively poorly.

cheap_charlie

carolt wrote: »

And this one:

http://www.guardian.co.uk/money/2008/aug/03/renting

I could have had thousands in rent, but my letting agency let me down

John Battsek was told he could charge £1,300 a week; his flat has been empty all summer. Be warned, says Graham Norwood

• Graham Norwood
• The Observer,
• Sunday August 3 2008

As lessons go, the one that documentary-maker John Battsek learnt about the property market has been an expensive one.

"As lessons go, the one that documentary-maker John Battsek learnt about the property market has been an expensive one.

Battsek - famous for his Oscar-winning 1999 film One Day in September about the Munich Olympics - admits that had he been more diligent when finding a lettings agent to rent out his London flat, he might have earned £5,000 in rent this summer. Instead, he has an empty apartment and is another example of an inexperienced landlord paying the price for failing to research how to let out a property.

Mr Battsek wanted to let his two-bedroom flat in Maida Vale, an affluent area of west London, for six months while working in the US. In early May he approached lettings agency Foxtons, which valued the flat at £1,300 a week.

At that point, Mr Battsek did exactly what a prospective landlord should not do. 'I hold my hands up to this: I was greedy and had no idea whether this was realistic. £1,300 is a ton of money and I needed it. So I said yes.' He was encouraged by a representative of Foxtons lettings department who, he claims, described the local rental market as 'flying' and predicted the flat would let 'in a second'. But then the problems started.

Two days later, after no viewings, Mr Battsek says he was advised by Foxtons to cut the asking rent to £1,100. 'I was upset I had to drop the price before anyone crossed my threshold, but I went along with it,' he says.

He claims the firm was slow at erecting a 'To Let' board, says he was told of only two viewings - both by would-be tenants wanting the flat for one month, not six - and that a string of his calls to the local Foxtons lettings manager went unanswered.
Five weeks later he says he was advised to drop the price further to £900 a week and that the property should be re-marketed as a one-bed flat to attract new viewers.

In the meantime, Mr Battsek asked a rival lettings agency to price his home. The result? A valuation of just £600 a week, less than 50 per cent of the original Foxtons figure. Now he has dropped Foxtons and is seeking another agent.

......"



Almost deserves its own thread, doesn't it?

And £600 a week for a 2 bed flat? Seems like it's still got further to go, to me.....

I don't have a lot of sympathy for him to be honest - any Londoner should KNOW not to trust Foxtons.

I bet he'd get at least three quotes if he wanted his house decorated, the fact he didn't get more information once Foxtons had come up with their "price" shows how he was blinded by greed.