Glut of properties for rental myth or not?

Gingernutmeg

Having moved a lot in the past couple of years, I've definitely noticed that there seems to be more available to rent in my price range (London and Wilts) but I would say too that there's a real shortage of decent quality rentals. Lots and lots (and lots!) of absolute dumps, and lots of places that are 'being rented out 'till I can sell so I'm not doing x, y or z just for a tenant', but very few good quality, clean and well maintained places.

socrates

Quote - 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.

Would love to see some evidence of this not just one here and there - not that I do not believe you but this is definitely not happening in London

stevros

http://www.nowinnofeesolicitorsuk.co.uk/hpc/test/readData.php?mode=a&id=11570&s=id1&f=a

Heres the result of a Barnard Marcus auction earlier in November it lists the price sold for each lot compared to the price that was last paid for the property and the dates.

check out lot no's 61, 67, 70, 107, 108, 114, 130, 137, 147 they all sold for less than half the last price paid for the property by the previous owners.

a lot of the properties didn't even sell.

socrates

Mostly out of London, a lot are new build properties which were bought overvalued and part of the scam developers, valuers and mortgage advisers have been involved in. I am not generalising here we all know this took place. There is a court case starting next week an 84 plot development in Thamesmead - google it.

Tassotti

stevros wrote: »

e.g a £200k house thats been repossessed and is now sold for £60k at a £140k loss.

Ha ha ha ha ha ..Sorry for laughing so much, but you are talking nonsense.

If a property 'worth 140K' sold for 60K, YOU would have been the first to get your offer in.

Show evidence....absolute rubbish..You only get a bargain if you are professional OR know an EA

This forum is about saving money, and the bigest saving you can make is on a house, but some people just want a house and are not concerned about blips.

This is what you dont understand.

TJ27

This explains a bit about the oversupply of rental properties in my part of the world:

http://news.bbc.co.uk/1/hi/wales/7734508.stm

It certainly isn't a myth. I meet with letting agents every week and they've been telling me for years, yes years, that there are tons of empty flats in Cardiff Bay. So it isn't even a recent thing.

Where do the owners live? In their homes I imagine. Most are amateur investors who thought they would make a few quid due to prices only ever going up. Some are owner occupiers who live in one bedroom and have now decided to rent out the other rooms to cover the mortgage. Perhaps some have even moved back with ther parents in order to try and rent out their unsaleable neg equity flat. I guess there are all sorts of scenarios.

I also personally know people who have negotiated absolutely massive decreases in rents because landlords want some sort of income rather than none at all. It seems to me that tenants hold most of the cards right now.

dobbie82

here in northwales there are loads of flats up for rent, but rents arent dropping at all, if anything they are rising.

Landlords seem to expect to buy a house on a mortgage of £700 a month and rent it out for £900pcm and just sit back and do nothing.

One LL is holding out for £900 a month even though the place has been empty nearly a year.

Big houses are getting made into flats left right and centre here, but nobody wants a flat, theres loads empty. we need family homes, but planning ties developers up in knots.

Dont know what the solution is though.

brit1234

dobbie82 wrote: »

One LL is holding out for £900 a month even though the place has been empty nearly a year.

Surely he would of got a lot more money if he reduced the rent £200 a month. No wonder we have record reppossessions of buy to let properties. From the treasury select comittee last week it seems increasingly the more properties you own the higher the percentage of repossessions per landlord. i guess with all the price drops highly geared landlords are increasingly in trouble.

Don't forget that banks who have repossessed properties are now increasingly renting them out them selves putting further downwrd preasure on rents.

Recessions typically force down rents as well.

So with recession, eastern europeans returning home, increasing rental supply, increase in lodgers and people moving home I think its safe to say rents will continue to fall.

Anyone increasing rents surely faces increased risk of void periods.

franklee

Some more cases what could increase the numbers of properties to let:

Middle earners who purchase a holiday home now needing to let it out, perhaps as they are worried about their jobs or just to make ends meet.

People still die. So perhaps their old home comes up for rent if it cannot be sold. Alternatively someone may have traded up buying the deceased's property while letting out their own as it hasn't sold.

Young people moving in as lodgers with others instead of buying or renting on their own.

themanbearpig

I'm seeing this is Nottingham. Ive been following the NG7-NG9 markets closely, and a lot of properties that arn't shifting are going into the rental market. 6 months ago, and average price for a 3 bed det in wollaton was £800, now its £650.
Rental prices ARE coming down in Nottingham.
But oddly, the asking prices for properties for sale are not moving, but it doesn't look like they're selling either.