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London rents fall...again
carolt
Posts: 8,531 Forumite
http://www.thisislondon.co.uk/standard/article-23588468-details/London+rents+fall+as+family+homes+fail+to+sell/article.do
London rents fall as family homes fail to sell
A HUGE glut of unsold London homes has sent rents tumbling by up to 20 per cent since the start of the summer.
Families that cannot sell their properties are instead becoming "amateur landlords" - but are finding that demand has dried up.
Rents are expected to fall further as the economic downturn deepens.
Surveyors expecting further falls in rents in London outnumber those expecting rises by three to one, according to research by the Royal Institution of Chartered Surveyors. This is a big turnaround since the summer when equal numbers predicted rises and falls.
The rental market has been hit by the wave of homes being put up for rent and a slump in demand from companies and banks relocating staff to London.
Lettings agents say it is the sharpest downturn since the aftermath of 9/11, but this slump is expected to last much longer. Emilie Dawes, lettings director at Marsh & Parsons, said: "The £1,000- to £2,000-a-week bracket - family homes typically occupied by bankers from Europe or America - has definitely been significantly affected. Also hit have been two-bedroom executive apartments, particularly along the Central line. Demand for these is down by 40 to 50 per cent."
She said rents in areas such as Kensington and Chelsea have fallen by as much as 20 per cent "and sometimes more".
Agents in other areas of central London favoured by wealthy financiers have also reported a huge fall in demand - to the point of none at all.
Christopher Ames of Best Gapp & Cassells in Belgravia said: "I would like to give you a figure but I haven't let anything. Asking prices have come down but there is no one looking."
Smaller flats are still being chased by first-time buyers who are holding off or cannot secure a mortgage.
Pimlico agent Edward Reeve said: "Rents for one- and two-bedroom flats in the £1,350 to £2,000 a month range have increased but it is apparent there is less demand for higher-priced flats. One recent letting at £2,900 per month was achieved after a two-month void. The previous letting was £3,445."
New landlords were advised to be sensible. Ian Potter, operations manager of the Association of Residential Lettings Agents, said: "Many landlords have entered the lettings market in the last year without perhaps planning to do so. I would urge these amateur landlords to exercise caution as it is a position of no little responsibility."
London rents fall as family homes fail to sell
A HUGE glut of unsold London homes has sent rents tumbling by up to 20 per cent since the start of the summer.
Families that cannot sell their properties are instead becoming "amateur landlords" - but are finding that demand has dried up.
Rents are expected to fall further as the economic downturn deepens.
Surveyors expecting further falls in rents in London outnumber those expecting rises by three to one, according to research by the Royal Institution of Chartered Surveyors. This is a big turnaround since the summer when equal numbers predicted rises and falls.
The rental market has been hit by the wave of homes being put up for rent and a slump in demand from companies and banks relocating staff to London.
Lettings agents say it is the sharpest downturn since the aftermath of 9/11, but this slump is expected to last much longer. Emilie Dawes, lettings director at Marsh & Parsons, said: "The £1,000- to £2,000-a-week bracket - family homes typically occupied by bankers from Europe or America - has definitely been significantly affected. Also hit have been two-bedroom executive apartments, particularly along the Central line. Demand for these is down by 40 to 50 per cent."
She said rents in areas such as Kensington and Chelsea have fallen by as much as 20 per cent "and sometimes more".
Agents in other areas of central London favoured by wealthy financiers have also reported a huge fall in demand - to the point of none at all.
Christopher Ames of Best Gapp & Cassells in Belgravia said: "I would like to give you a figure but I haven't let anything. Asking prices have come down but there is no one looking."
Smaller flats are still being chased by first-time buyers who are holding off or cannot secure a mortgage.
Pimlico agent Edward Reeve said: "Rents for one- and two-bedroom flats in the £1,350 to £2,000 a month range have increased but it is apparent there is less demand for higher-priced flats. One recent letting at £2,900 per month was achieved after a two-month void. The previous letting was £3,445."
New landlords were advised to be sensible. Ian Potter, operations manager of the Association of Residential Lettings Agents, said: "Many landlords have entered the lettings market in the last year without perhaps planning to do so. I would urge these amateur landlords to exercise caution as it is a position of no little responsibility."
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Comments
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You know the theory that rents are falling cos people can't sell their homes; therefore, they rent them out, resulting in a glut of houses for rent on the market. Well, it doesn't make that much sense to me.
The people wanting to sell must live somewhere. I can't imaging they buy another house because that would be a big financial risk. Also they must know that the price of the house they've failed to sell is falling. Therefore, they must also rent. So doesn't the number of houses on the market stay the same?.
My own opinion is that there's more houses for rent on the market because immigrants are leaving the country due to the recession and as people are being made redundant/not getting bonuses/pay rises, they're negotiating hard for a discounted rent.I am an employment solicitor. However, my views should not be taken to be legal advice. It's difficult to give correct opinion based on the information given by posters.0 -
Ewarwoowar2 wrote: »You know the theory that rents are falling cos people can't sell their homes; therefore, they rent them out, resulting in a glut of houses for rent on the market. Well, it doesn't make that much sense to me.
The people wanting to sell must live somewhere. I can't imaging they buy another house because that would be a big financial risk. Also they must know that the price of the house they've failed to sell is falling. Therefore, they must also rent. So doesn't the number of houses on the market stay the same?.
My own opinion is that there's more houses for rent on the market because immigrants are leaving the country due to the recession and as people are being made redundant/not getting bonuses/pay rises, they're negotiating hard for a discounted rent.
I have friends who have left rented accomadation to move back with parents and others who are renting out spare rooms. On top of that you have the european migrants going home and the homes that can't sell be rented.
I wouldn't like to be in buy toilet.:eek::exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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I feel for anyone who is renting from a rookie/amateur landlord.
We had this experience a few years back and it was a nightmare getting things like the boiler fixed/sorted when they went wrong.
We had to threaten court action to get our deposit back when we moved out - not because the landlord was being intentionally difficult but because they were completely ignorant as to the laws surrounding renting property and legitimate uses of tenants deposit!
e.g. LL wanted to take money out of our deposit for things like a fence panel that was damaged on a particularly windy night and thought she could withhold the lot for nonsense like that!!!0 -
http://www.thisislondon.co.uk/standard/article-23588468-details/London+rents+fall+as+family+homes+fail+to+sell/article.do
London rents fall as family homes fail to sell...A HUGE glut of unsold London homes has sent rents tumbling by up to 20 per cent since the start of the summer......
Surveyors expecting further falls in rents in London outnumber those expecting rises by three to one, according to research by the Royal Institution of Chartered Surveyors.....The rental market has been hit by the wave of homes being put up for rent and a slump in demand from companies and banks relocating staff to London.....
. Also hit have been two-bedroom executive apartments, particularly along the Central line. Demand for these is down by 40 to 50 per cent."....
She said rents in areas such as Kensington and Chelsea have fallen by as much as 20 per cent "and sometimes more"......
Smaller flats are still being chased by first-time buyers who are holding off or cannot secure a mortgage.
Pimlico agent Edward Reeve said: "Rents for one- and two-bedroom flats in the £1,350 to £2,000 a month range have increased .... "
Bankers etc on big expense accounts may be thin on the ground for the time being, but I note that the bottom line, concerning 'normal' rents, is rather less dramatic. Top rents would have a very long way to drop before becoming affordable .0 -
Heh I just had my rent go up for the first time since 2002! (zone 2 london)Prefer girls to money0
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Landlords will always find tenants, and the fact of the matter is there is a shortage of housing so I wouldn't take too much notice of what the report says. People, especially young people and foreigners, will always want to live in London. It's always been that way and always will be.
But the City is bust - foreigners are already moving out. The bonus boys aren't buying property anymore and are having to rent out what they can't sell, leading to a glut on the market. Some EAs in the Canary Wharf area, for example, aren't taking any more new instructions for rentals; so the 'shortage' argument is a bit weak I am afraid.'Never keep up with Joneses. Drag them down to your level. It's cheaper.' Quentin Crisp0 -
I feel for anyone who is renting from a rookie/amateur landlord.
We had this experience a few years back and it was a nightmare getting things like the boiler fixed/sorted when they went wrong.
We had to threaten court action to get our deposit back when we moved out - not because the landlord was being intentionally difficult but because they were completely ignorant as to the laws surrounding renting property and legitimate uses of tenants deposit!
e.g. LL wanted to take money out of our deposit for things like a fence panel that was damaged on a particularly windy night and thought she could withhold the lot for nonsense like that!!!
True. I remember in the last housing slump, a lot of couples reluctantly rented out spare rooms to lodgers to try to keep up with mortgage payments. You'd apply to ads in loot for 'Flatshares', but instead of the cast of 'Friends' you got a moody couple with a list of 'do nots' for you to agree to and some laughable rent for a box room. :mad:'Never keep up with Joneses. Drag them down to your level. It's cheaper.' Quentin Crisp0 -
Austin_Allegro wrote: »But the City is bust - foreigners are already moving out. The bonus boys aren't buying property anymore and are having to rent out what they can't sell, leading to a glut on the market. Some EAs in the Canary Wharf area, for example, aren't taking any more new instructions for rentals; so the 'shortage' argument is a bit weak I am afraid.
Are you thinking that there is to be a mass exodus of foreigners, or just the corporate ones on expenses? Some of them will be leading the life of Riley nowadays, if they get paid in their own currency and that currency is Euros or $.
Oh dear, if the City is bust then we are all doomed....but in case it is just a very very nasty recession.... I recall that property in Docklands, etc, new built for the City also languished on the market in the last recession.
Presumably everybody has to live somewhere, and chances are that those who are selling an expensive pad will have to buy a cheaper one . Who would want to risk capital in the banks at this time - property still has to be more useful!0 -
Austin_Allegro wrote: »True. I remember in the last housing slump, a lot of couples reluctantly rented out spare rooms to lodgers to try to keep up with mortgage payments.
Yes and those that weren't taking in lodgers were flogging water purifiers to their friends. You would be invited to dinner and end up feeling obliged to make a purchase, (unless you had also lost your job)
It's about for GB to raise the tax free allowance for lodgers, after all these years. Will he take inflation into account, I wonder?0 -
Austin_Allegro wrote: »But the City is bust - foreigners are already moving out. The bonus boys aren't buying property anymore and are having to rent out what they can't sell, leading to a glut on the market. Some EAs in the Canary Wharf area, for example, aren't taking any more new instructions for rentals; so the 'shortage' argument is a bit weak I am afraid.
is the City bust or is it suffering a bad recession? i believe just a bad recession.
as for foreigners moving out - i don't think so, they're moving back in to grab a bargain from those that need to sell; see below from the FT
http://www.ft.com/cms/s/656a9a72-cdfd-11dd-8b30-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F656a9a72-cdfd-11dd-8b30-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fworld%2Fuk0
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