It pays to rent

carolt

http://property.timesonline.co.uk/tol/life_and_style/property/investment/article4954616.ece

It pays to rent a property

The balance of power has shifted as people realise that renting is the way to ride out the credit crisis

In the same way that mortgage borrowers, once overwhelmed with lender largesse, now face rejection, many tenants who formerly had to tolerate flats with tired decor and high rents can now enjoy more style at less cost. This is thanks to an increased supply of rental properties in many areas.

....Jo Eccles, of Sourcing Property, says that not so long ago 80 per cent of her clients were looking to buy. Now the same number are looking to rent, having done their sums. She says: “Renting is currently cheaper. The typical mortgage rate is 6.25 per cent; the typical rental yield - the rent as a percentage of the property value - is 4.5 per cent.”

.....Rents are now starting to fall in the Home Counties - even in locations within an easy commute from London - and Hamptons suspects that these patterns of activity will “ripple out”, rapidly turning into a nationwide trend.

mr.broderick

Yeah i think everyone would rent if they could...

Gorgeous_George

Well, a quick check on Rightmove shows just 7 properties (within half a mile) with 3 or more bedrooms (my BTL has four). Only one is cheaper (5% cheaper with the rest at least 25% more expensive).

Other areas will be different.

GG

baby_boomer

Observer - It's a great time to be a tenant

"..With the domino effect of buyers who can't buy, leading to sellers who can't sell, a growing number of landlords are being forced to put their properties on the rental market instead. This sudden glut in rental properties means that despite growing numbers of prospective tenants, the amount being paid in rent is actually going down.Figures from the property-search website Globrix support this conclusion. June saw a steep increase of 13.8 per cent in the number of properties to rent, according to the site; by July there was a further increase of 0.8 per cent, and 4.6 per cent in August.

This has translated into clear falls in rent - in June the average UK rent was £950 a month; in July it dropped to £850, and then to £835 in August..."

LillyJ

Although in saying that I know of a few people who have been made homeless due to their landlords either selling up quick or getting repo'd. (one girl it has happened to twice since the summer and she is now living in a bedroom at the hospital where she works as a doctor).

baby_boomer

Yes there are alternatives to renting. Loads of people are going to move back in with their parents or share their friend's two bedroom flat.

The "shortgage" of property ----> prices/rents will have to go up argument is a bucket full of holes.

dopester

LillyJ wrote: »

Although in saying that I know of a few people who have been made homeless due to their landlords either selling up quick or getting repo'd. (one girl it has happened to twice since the summer and she is now living in a bedroom at the hospital where she works as a doctor).

Big deal. A little inconvenience for her, and sounds like she is saving a bundle now.

If the trend continues nationwide like in that article, then she could find a new decent place to rent, but more cheaply in the rent price crash. You can try and take sensible measures against losing out if owner sells or gets repo'ed... but all the same, the end result is house prices and rents are crashing... leaving people with capital and a job in a good position to buy in a year or so.

Helen O'Rourke, who works in PR, bought a three-bed flat in Streatham Hill as a rental property in early summer. Since then she has only had three viewings; the flat has 'been absolutely empty ever since,' she says. 'When I bought I didn't expect to make a big capital gain immediately, but I was confident I would make a good rental return - at least cover the mortgage.'

When she initially applied for her buy-to-let mortgage, local agents suggested she would achieve between £1,250 and £1,300 a month. That was in June, however. When she approached agents in August to rent it out, the market had already dropped significantly, with one telling her she would get '£900 tops'.

MissMoneypenny

LillyJ wrote: »

Although in saying that I know of a few people who have been made homeless due to their landlords either selling up quick or getting repo'd. (one girl it has happened to twice since the summer and she is now living in a bedroom at the hospital where she works as a doctor).

That's not really homeless though.

I've been stuck with a house I couldn't sell and it was a nightmare. I really feel for those trying to sell their houses now. Given the choice of being stuck with a house that I couldn't sell and being given 2 months notice to move to another house, from a LL, I would choose the latter every time.

neverdespairgirl

dopester wrote: »

Helen O'Rourke, who works in PR, bought a three-bed flat in Streatham Hill as a rental property in early summer..

Clever girl, got there just in time....

neas

Rentd in my area are coming down according to property bee... first time i;'ve seen mass rent drops since i started recording data in march.

mystic_trev

Helen [strike]O'Rourke[/strike] a Dork who works in PR, bought a three-bed flat in Streatham Hill as a rental property in early summer.

:rolleyes: