Guardian: Tenants sitting pretty as rents fall.

lynzpower

Microstar wrote: »

That's what puzzles me. You'd expect things to balance out with no overall change in the number of properties for rental. In my area there are definitely a LOT more properties available to rent. Maybe people are leaving the country in large numbers, or we have internal migration going on ??

You just need to look about these boards to find the answer

" I cant afford my mortgage so im going to live with my mum for a bit"
"me & the boyfreind want to move in together but we both have properties, we need to sell at least one"

I fear that this "one bed singleton" movement in housing provision has been woefully overstated. Yes many people do want to live on thier own, but not forever. Even if you think youll be on your own forever ( as I did) love can come along and plans change. I also fear that many others will have thought that "If I do want to move, i can just sell it for a profit" lucky for me it did work, but for so many others the timing is all wrong and they are trying to sell now.

I also think the one bed renting situ will also decline in popularity in this sort of climate. Advice on DFW is often " you live in a one bed flat at the mo, could you move to a houseshare where your bills will be lower" as times get tougher and utilities rise again and again, sharing the bills on a 3 bed flat with freinds is going to be a lot more financially palatable than dealing with one set of bills on ones own whilst not having wage increases.

dopester

Jumping_Bean wrote: »

They rent houses that other people couldn't sell. Eventually everyone will live in rented accommodation but everyone will also be a landlord. :cool:

Classic. :rotfl::rotfl::rotfl:

WTF?_2

Jumping_Bean wrote: »

They rent houses that other people couldn't sell. Eventually everyone will live in rented accommodation but everyone will also be a landlord. :cool:

Yes - get on board the rental ladder now, before it leaves you behind

If these people have large amounts of equity in their old house - and by extension quite small mortgage payments - then fine. They ought to be able to make the rental sums work, even after they pay their tax on the rental income.

But what about the new, presumably better and more expensive place? Normally you rely on a fair bit of profit from your previous sale to make the next step more affordable. Without actually selling the place you have, the mortgage on the new house is going to be massive.


I just can't see this scenario working for that many. I know that a couple of years back in late 2005 when the market was tricky, estate agents were proposing it as a way to keep people moving up the ladder even when they were having problems shifting their old house. Thus leaving the suckers buying with debt on with TWO expensive, depreciating assets. :rolleyes:

Looks like they are pushing that old trick again. I just hope people aren't dumb enough to fall for it unless it actually does make sense for them.

baby_boomer

StevieJ wrote: »

So where do all these flooders go to live?

Some will move in with parents, friends or children.

When times get tough you think up solutions.

gussie

Dee140157 wrote: »

... As a consequences tenants are able to look around for higher quailty at a lower price ...

Higher quality tends to come with higher Council Tax and Water Rates! I've seen some so called bargain detached properties locally that also come with eye watering Band G rates!

dopester

Gorgeous_George wrote: »

In other areas, prices will hold their own or rise. I plan to increase my rent by 10% next April.

This statement stuck in my head for the last 5 weeks as one of the weirder expectations I've read recently.

If I had even one BTL now on high margin, I be in a constant state of worry for all the economic misery unfolding, and the negative impact it seems set to have on rents.

What do you do when your whole "investment" model - including mortgage repayments - is based on a minimum amount of rent per month/year, and circumstances change, forcing rents down?

Especially if you have 2 or more BTLs.

:eek:

http://news.bbc.co.uk/1/hi/business/7625419.stm

Is my job more precarious than before?

Potentially - and not just for employees of Lehman Brothers or HBOS or Lloyds TSB.

In more normal times, the big economic news of the week would have been the further rise in unemployment.

Let us remember what that story is. Unemployment is now at its highest level for nine years at a rate of 5.5%.

Redundancies have been accelerating and the number of vacancies, and those actually in work, is dropping.

QTC

Well, I hope that tenants are getting a bit of relief from constant upward march of rents. I've been here since 2005, and every year, on the dot, I've had a letter from the landlords' agent asking me to agree to a rent review..normally 6%, when inflation was around 2%. This year, I've heard nothing so far. A few more years of this, and my overall rent rise since I moved in might actually come down to match my increase in income over that period..

vigesimal

dopester wrote: »

This statement stuck in my head for the last 5 weeks as one of the weirder expectations I've read recently.

If I had even one BTL now on high margin, I be in a constant state of worry for all the economic misery unfolding, and the negative impact it seems set to have on rents.

What do you do when your whole "investment" model - including mortgage repayments - is based on a minimum amount of rent per month/year, and circumstances change, forcing rents down?

Especially if you have 2 or more BTLs.

:eek:

http://news.bbc.co.uk/1/hi/business/7625419.stm

dopester, have you never played poker with someone who is holding a b u m hand, but he doesn't realise you all know it is a b u m hand?;)

PasturesNew

lynzpower wrote: »

Even if you think youll be on your own forever ( as I did) love can come along and plans change.

Not for all of us
I'll be single/living alone forever.

PasturesNew

As a tenant I know my LL won't be reducing my rent. So the only way to rent cheaper would be to move. But moving requires about £200 in agent fees again for credit checks.

So I'm staying where I am. Although a flat in my block is asking £25/month less than it was a year ago when I viewed that one and this one. Also, a 1-bed house along the road is for rent just £60 a month more than my current studio... I'd be tempted except it's unfurnished and I don't want to accumulate belongings nor tie myself into a fixed AST (I am on periodic at the moment).

So, on the whole, existing renters can't easily benefit from falling rents, they might benefit from £0 increases. But, depending on the area, for some the difference in rents might be worth moving for. For me, to save £25/month by forking out £200 just doesn't make sense.