Rents Falling - FT

dopester

IveSeenTheLight wrote: »

Please please please stop misquoting me.
I have never said the the above.
You misquote so much its unbelievable. I've let a few slide as I do not want to start you hounding me again but once again, please, please, please stop misquoting me.

If you want to quote me, show a link saying what you claim I say.

You are right in that perhaps I confused your outlook with Mircea or the other one similarly named.

I still think you hugely underestimate the shrinking of the economy and the effects of unemployment, pay-cuts and less hours - especially on house prices.

IveSeenTheLight wrote: »

Increasing unemployment has nothing to do with the change in society to being two income families.

Unfortunate as unemployment is, even if it returns to thehigh or 3 million +, the majority of people in the UK will still be earning.

IveSeenTheLight

dopester wrote: »

You are right in that perhaps I confused your outlook with Mircea or the other one similarly named.

I still think you hugely underestimate the shrinking of the economy and the effects of unemployment, pay-cuts and less hours - especially on house prices.

I think you definately must be confusing me with someone else.

My stance on here is that I believe that each area is affected differently with reference to house prices and indeed for most things in life.
There is a UK average and while some areas will go along with the average, most will be affected worse or better than that average.
I recommend everyone to review the situation for their specific areas as it is highly likely to bedifferent from other areas.

When I post about my personal situation, of course I am referencing the specific area I have a vested interest in and I openly state that this is so.
I do not state that what happens in my vested interest will happen everywhere else (unlike many who state things as it will happen nationwide)

I do think that my vested interest area will be shielded to a lot of unemployment rises. This does not mean I think that it is immune i.e. the building trade as you have pointed out.
My vested interest is mainly an oil related city, therefore I'm sure you can understand that with oil price so high, there is an urgency from the oil companies to produce and develop oil producing wells and therefore these private sector positions are in high demand.
Now if the oil price was to plummet........... then I may think otherwise.

Getting back to your quote from me: -

Originally Posted by IveSeenTheLight
Increasing unemployment has nothing to do with the change in society to being two income families.

Unfortunate as unemployment is, even if it returns to thehigh or 3 million +, the majority of people in the UK will still be earning.

I still believe this to be true.
What has increasing unemployment got to do with the fact that society has changed from being a single income property to a far increased multiple income properties?
or the fact that if unemployment reached the 3 million+ high, the majority of people in the UK will still be earning.

I cannot see how this quote is referenced as you believe I have said

Originally Posted by dopester
and ISTL has already dismissed unemployment as having any bearing on house prices, as "people will just walk in to a new job."

neverdespairgirl

carolt wrote: »

"I am a landlord in London and this sudden craze for tenants attempting to negotiate rents downwards is a nightmare for everyone.

Presumably not quite a nightmare for everyone, if "everyone" includes the tenants!

dopester

IveSeenTheLight wrote: »

I cannot see how this quote is referenced as you believe I have said[/i]

You have my apologies. A couple of posts up (number 72) I admitted to mixing your view up with one of the hardliners... Mircea or the other one similarly named.

Your outlook is 3m unemployed won't be too much of a drag..... whereas I believe we are in for much darker times. Lets not argue though as we know we can't convince each other.

martinman3

fc123 wrote: »

The letting agent who manage the property we rent (Brighton area) is full of chit chat. She said they were overwhelmed with rentals that they couldn't find tenants for..this was 4 months back....they aren't selling anything either.
One office has shut and hers is being run on skelton staff levels too.
Houses are seem to be still in short supply though....must be the 1 and 2 bed stuff.

The Brighton & Hove area is an interesting example of how rents are both rising and falling. There is a severe shortage of housing caused by the fact that the city is bordered by the South Downs to the North, which cannot be built on, and the sea to the South. This leaves only brownfields sites for new builds of which there are not many and most of those are a fair distance from the sea. (In fact, most of the new builds would have been on two major developments on the beach but both have been shelved because of the credit crunch )

The result is that good value rental property which is not too far from the beach is and always will be in demand and rents for tidy 2 bed flats (£800 pcm) are still rising slowly. However, the luxury 2 bed flats (or BTLs in trouble and asking for too much) (> £1000 pcm) seem to stay on the letting agent's lists.

My conclusion is that as tenants have less income available they are moving to better value rental properties where before they may have paid £200 extra a month for a luxury flat in a purpose built block with a good view, a lift and a parking space.

I believe that those landlords that assumed that they would always find a tenant to pay the rent asked regardless of the location of the property within the UK will be in for a surprise.

fc123

martinman3 wrote: »

The result is that good value rental property which is not too far from the beach is and always will be in demand and rents for tidy 2 bed flats (£800 pcm) are still rising slowly. However, the luxury 2 bed flats (or BTLs in trouble and asking for too much) (> £1000 pcm) seem to stay on the letting agent's lists.

My conclusion is that as tenants have less income available they are moving to better value rental properties where before they may have paid £200 extra a month for a luxury flat in a purpose built block with a good view, a lift and a parking space.

I believe that those landlords that assumed that they would always find a tenant to pay the rent asked regardless of the location of the property within the UK will be in for a surprise.

If a LL with a £1000pcm property is desperate for a tenant and reduces the rent to, say, £900 pcm (and subsidises the mortgage himself) will this then push down the rentala values of the £800 pcm properties.?........as then the gap between Luxe and Basic is narrowed.
This sector of the market could push rental levels lower.

Friend just took on an £800 pcm 2 bed basic in Hove and got £50 off.

Generali

fc123 wrote: »

If a LL with a £1000pcm property is desperate for a tenant and reduces the rent to, say, £900 pcm (and subsidises the mortgage himself) will this then push down the rentala values of the £800 pcm properties.?........as then the gap between Luxe and Basic is narrowed.
This sector of the market could push rental levels lower.

Friend just took on an £800 pcm 2 bed basic in Hove and got £50 off.

It's exactly what happens. Why not spend an extra few quid on a place with a spare bedroom or that's a bit closer to the station if you can? Similarly, if the next place down the price scale cuts prices you might think to yourself, "Hmmm, I can save £250 pcm if the kids share a bedroom so will be able to afford to buy a place next year". That tends to drag down the price of the next place up.

In the 1980s crash, the most serious problem for many sellers were those with little studio flats in the less desirable areas. As the prices of bigger places fell, they had nowhere to go on price.

fc123

Generali wrote: »

It's exactly what happens. Why not spend an extra few quid on a place with a spare bedroom or that's a bit closer to the station if you can? Similarly, if the next place down the price scale cuts prices you might think to yourself, "Hmmm, I can save £250 pcm if the kids share a bedroom so will be able to afford to buy a place next year". That tends to drag down the price of the next place up.

In the 1980s crash, the most serious problem for many sellers were those with little studio flats in the less desirable areas. As the prices of bigger places fell, they had nowhere to go on price.

It's great getting the hang of simple economics ~(rather than being buffetted by the effects...without quite getting 'Why'?)....sorry, just giving myself a pat on the back.
IIRC, early 90's, the 1 beds and studios couldn't be given away. I also remeber the trend from the 80's of carving up 3 bed houses into 2 flats, being reversed in the 90's by people buying the 2 flats and turning the property back in to a house.
I guess those houses are 3 flats now.....waiting to be turned back into houses with the coming adjustment to prices.

Generali

fc123 wrote: »

It's great getting the hang of simple economics ~(rather than being buffetted by the effects...without quite getting 'Why'?)....sorry, just giving myself a pat on the back.
IIRC, early 90's, the 1 beds and studios couldn't be given away. I also remeber the trend from the 80's of carving up 3 bed houses into 2 flats, being reversed in the 90's by people buying the 2 flats and turning the property back in to a house.
I guess those houses are 3 flats now.....waiting to be turned back into houses with the coming adjustment to prices.

Markets all come down to individual choices really. People try to imbue them with some kind of mystical force or power but a market is just the sum of the choices made by people in the market.

If butter goes up in price some people will switch to marg. Others will use less butter. Others still will eat more butter as perhaps it is a status symbol now. Producers might decide to produce more butter as there's more profit in it per unit now or they might decide to produce more marg as the size of the market is bigger so you can sell more units and make more money that way.

The market for butter is just the sum of all of those indvidual and group decisions.

chewmylegoff

brit1234 wrote: »

especially as rented stock increases from people who can't sell.

people always say this, but i don't understand where the person who decides to rent their house out goes in order for this to happen. surely the majority go into rented accomodation themselves. i suppose if they had enough equity they could withdraw it and switch to BTL and then buy something else, but it has to be a fairly small minority of people who can afford to buy another house when they can't sell their existing one.