Glut of properties for rental myth or not?

socrates

My areas of interest are - Walthamstow, Haringey and Hackney

Cheers

PasturesNew

poppysarah wrote: »

Property bee works on rents on rightmove too?

Yes it does and I've seen quite a lot of rent reductions appear

monkeymaster

I had a viewing of a place a few weeks ago, an old lady had moved into a home and couldn't sell so it was up for rent.

There are also instances of couples each owning their own place moving in together and wanting to sell one.

People who have sold moving back in with parents/friends leads to more vacant homes somewhere along the line.

There are definately more coming onto the rental market, particlaurly ones you wouldn't normally see, like 5 and 6 bed detached at incredible prices for what you get. Rents definately falling in the areas I interested in - Midlands.

fc123

Brighton houses ...loads more on to let now than 3 years ago.

Our letting agemnt said that the market is overloaded with properties to let now.
I also noticed a lot of ex council houses in the area ( 4 or 5 beds and marketed to students) so I don't know if the uni now supplies more accomodation on site, or these were houses rented out to E Europeans, who have now gone home due to lack of work.

I am not familiar with the 1 bed/2 bed flat market down here but the derelict cottage have rented in Posh St since April 2007 (the rent increased by £50 pcm after 1 year) is now over market value for the area.

The house we own (SE London) was rented out for 3 years and the rental value has gone up a bit, if we rented her out again, but that area has quite a lot of family homes to rent now, whereas in 2005, we were quite rare....so we wouldn't know what the rental value would be unless we put her on.



We now live between 2 places due to work BTW.....and it's mighty inconvenient too.;)

fc123

Just to add, a family member tried to sell this year.....but he didn't REALLY want to...so kept the price high. His partner wanted to move.

To keep the peace, they re-located and rented in the new area....rented out his house.
Best thing to do really. Makes life more complicated but means if new area doesn't work out, then you can return to your old life.

At some point though, if things go the way some of us think on this board and the magical, booming, housing market doesn't return to it's former glory, you will get a lot more stuff come on the market over the next 2 years.

Those 'waiting for the market to recover' may hold a different view in 2 years time.

Being a landlord is OK (we didn't have too much hassle) but some temporary landlords are going have problem tenants etc and will then sell at whatever the market will pay.

stevros

If landlords are snapping up repossessed properties at 60% 70% discounts from last years prices at auction and letting them out surely they can afford to rent them out at rates cheaper than other properties on the market and still make more profit. this drives rental prices down as repossessions rise?

I think cash buyers who wait until the market levels out will be able to undercut the Leveraged Buy-to-let landlords who had small deposits down on properties, no equity due to recent house price falls, and will be in massive negative equity once the market finishes correcting (causing more repossessions)

This cycle is going to continue until prices fall to a level where peoples aspirations match the level of risk that banks are prepared to lend at.

i.e joe bloggs on £20k pa with a few debts but £10k savings wanting to buy a house 8 times his income at £160k isn't realistic as all the risk lands on the bank.

Banks not lending is a myth they WILL lend IF you have a 25% deposit and are borrowing 3 - 4 times income

Banks are predominantly lending at 75% LTV as they are factoring in the risk of 25% further falls. so if the market does fall by another 25% then if the bank sells the house the bank will not lose any money.

House price £160k
Deposit £40k
Mortgage £120k
Income needed £34k pa


House price £80k
Deposit £20k
Mortgage £60k
Income needed £17k pa

how many first time buyers do you know on 17k pa that have 20k saved up and are prepared to punt it on an asset that is losing more than they earn in a month? and what can you buy for £80k nowadays?

In fact how many people on £17k pa have NO debts/over draft/loans/credit cards
let alone have £20k saved up?

isn't average wage £25k at most

Something doesn't add up and it doesn't take a genius to see it.
Cheaper Houses to rent and buy will benefit everyone in the longterm surely?

Radio Four - You and Yours - Economist Robert Shiller gives his views,

Tassotti

Have seen an increase in 3/4 bed properties for rent in my area.
Most probably people who cannot sell and have deided to rent them out. However, most of these potential LLs will now be renters. So, realistically, all the STRers are paying each others mortgages until they think they can afford to get back into their own home!?!!?!

Strange

I own 1 and 2 bed properties...These are, however, increasing in rent (as always)

Again TTRTR

Tassotti

stevros wrote: »

If landlords are snapping up repossessed properties at 60% 70% discounts from last years prices at auction and letting them out surely they can afford to rent them out at rates cheaper than other properties on the market and still make more profit. this drives rental prices down as repossessions rise?

Been buying for 70% market value for 3 years now....

Why should LL's reduce rents just to satisfy you?

Drive rents up I say

dopester

Do that Tass, and you can wave good-bye to your tenants and enjoy your voids.

Plenty of competing landlords willing to steal your business, offering cheaper rents rather than having voids.

The only thing that might save you in the short-term, assuming you operate near the lower end of the market in BTL, is people downsizing from swanky houses and fancy areas, as they can no longer afford top-end rents.

Thus supporting rent prices up towards the lower end. However that will only prove a temporary fix, before rent prices crash hard in the lower end of the market as well.

Rents fall in wealthier boroughs
Sri Carmichael
28.11.08

RENTS in the most affluent London boroughs have fallen over the past three months as the economic gloom deepens, while those in poorer areas have risen, figures show today.

Areas popular with high-earners such as Kensington and Chelsea, Westminster and Richmond-upon-Thames, saw average monthly rents drop by up to three per cent.

stevros

Tassotti wrote: »

Been buying for 70% market value for 3 years now....

Why should LL's reduce rents just to satisfy you?

Drive rents up I say

Tassotti i think you've missed the point, I meant at auctions recently properties have been selling for 30- 40% of there value sold at peak in 2006/2007 i.e a 70% discount

e.g a £200k house thats been repossessed and is now sold for £60k at a £140k loss.
If I was to come in with my £45k deposit and get a mortgage for the remaining £25k on the remainder at a decent rate as I'd have a high LTV i could undercut other landlords who had bought similar houses for say £160k on 10 - 15% deposits who require larger rents just to cover the interest on there interest only mortgage payments

Hell for the remainning £25k i could probably get it on credit cards at 0% and avoid a mortgage altogether.

There is money to be made from houses just like any other investment you just need to be in the right place at the right time and be able to spot value and buy cheap and recognise that the value of the property will go up and down but on average will increase in value about the same rate as inflation long term.

Too many people for the last 8 years have had the mentality that i MUST buy a house as its a good investment and it doesn't matter if I over stretch myself as it WILL make me money regardless of whether I know what I'm doing or not so taking out interest only mortgages at ridiculous multiples of their income with little or no deposit

For some people this has essentially been the same as putting your entire life savings and taking out a loan on top and putting the lot on Black and praying Red doesn't come up.