Glut of properties for rental myth or not?

socrates

I have a question - I keep reading that people who cannot sell their houses are renting them out causing there to be a glut of properties for rental thus reducing rental rates. So where are they living or does that mean they are living in another rented property. Or are they BTL properties in which case as a landlord myself, unless there is a damn good reason I am not going to sell any of my properties.

I understand there are many factors affecting rental rates at the moment but in my own personal experience rents are up (in London). Problems may arise when redundancies increase.

My friend a letting agent in East London can fill 1/2 bedroom flats in average condition in 48 hours with 5 people wanting every flat. They are also homelet pre-qualified and not DSS - not that there is anything wrong with DSS tenants in a lot of cases.

Is the press talking the market down?

neverdespairgirl

socrates wrote: »

I understand there are many factors affecting rental rates at the moment but in my own personal experience rents are up (in London). Problems may arise when redundancies increase.

Is the press talking the market down?

It was RICS who said rents were on the downward path, particularly in London. That is also my experience where I live - rents have been static for 18 months, so dropping in real terms. That's WC1.

LisaLou1982

LOL the press (and certain people on these forums) will always try the doom and gloom approach.

There is still a high demand in general for rented accommodation in my area although there are certain areas where there are more houses up for rent than others - in this instance, tenants are putting forward offers on the rent.

Speak to the letting agents and see what their advise is regards rent in your area - they should be able to advise you of properties recently rented out and the prices achieved

socrates

Would still like to know where will the people be living who cannot sell their houses so are trying to rent them out

PasturesNew

Here is a source of official figures
http://www.rentright.co.uk/rrpi.aspx

You can search by town as well as type.

socrates

Still does not answer the question I asked specifically about people who are trying to rent out their houses as they cannot sell - where are they living?

beingjdc

Rents definitely falling substantially here, and a lot of property staying empty for a long time.

Where are people staying? Well, if you want to move for the short-term in financial difficulty, you downgrade don't you? And renters live in a more compact way, so three examples of falling demand.

A couple need to move from a 3-bed house, but can't sell it, so rent it out. It probably goes to three people sharing, as you normally don't rent a 'spare room'. The couple, however, rent a 1-bed place while waiting to see what happens. Total supply effect is an extra 2 spare 1-bed places on the market.

Or, a young person finishes University and moves back to their home town. They look for a job and make plans to move out. Suddenly the economic climate worsens. They find a job, but it isn't very secure and doesn't pay as much as they'd hoped. They decide to carry on living with their parents for a bit.

Or, a bricklayer moves to England in 2004 having learnt the trade in Poland. They rent a flat in Norwich and earn good money building more flats in Norwich, which Polish builders move into so they can build more flats. Suddenly and for no obvious reason Inside Track goes bust, the new-build market collapses, nobody wants Polish builders any more. Our friend returns to Poland, freeing up another flat.

PasturesNew

There is a massive glut in the two areas I watch closely.

When I moved into where I am now just over a year ago it was definitely THE cheapest in the whole town. In the last month this seems to have changed dramatically. Piles of new stuff coming up for rent, one or two are almost 2/3rds the price of this one. A handful are definitely cheaper, Give it another 3 months I might even move to a better place cheaper it seems.

Where I used to live, there was only ever 2-3 properties for rent - at high prices. Suddenly, seemingly from nowhere, there's several dozen - and up to 2/3rds of the price for the starter end of the market.

Things are certainly starting to change.

I think a large chunk of the glut are people who thought they were property developers and got stuck with a house that was worth less than they'd just forked out. Or people who thought it'd all be "back to normal" if they just rent it for a year or so. These properties, that would have gone up for sale, are instead up for rent.

socrates

Thanks for the posts guys very good answers. I suppose ultimately it depends upon location and circumstances at any given moment. Long term I suppose the employment market will determine everything. I think the biggest difference from the past is even those who want to buy are finding it difficult to get a mortgage so perhaps they will rent and that is why there are pockets of demand for rental properties.

Wait and see approach methinks!

poppysarah

There are new to let boards every day in my area. Some disappear quickly but some are still there so I assume it's either an ad or the rents too high.

Property bee works on rents on rightmove too?

neverdespairgirl

OP, which bit of London are you concerned with?