Masive collapse in rental values - 3-4 years till prices bottom out

chucky

stevetodd wrote: »

Obviously good news for Carol if she is paying less rent now than she was 19 years ago, well done Carol!

i don't think she is somehow

Cleaver

a6windows wrote: »

in the bible which by sum is hailed as the biggest prosperaty hand book it says many times ask and though shalt receive .with this recession i think there are to many people asking for just that.money is made round to go round

I've read that post three times and still don't understand it.

boyse7en

chucky wrote: »

My mortgage interest payments have dropped 100% with all of these rate cuts and rental rates have only dropped maximum 10% - yes things are going very well.
Thanks for the concern carol.

100% drop in interest payments?????

Did you win the lottery and pay them all off at once?

ukjoel

Can only speak from personal experience but had house up for sale from December 07-September 08. No takers.

Put it back on rental market 9 months after taking it off and had 3 offers for it within 48 hours all at 15% above what it had previously been rented at.

Agents told me that properties that were aimed at rental market were going fast but too many people who couldnt sell and thought they would do a quick rent were struggling for following reasons.

Being unrealistic with rent and expecting huge amounts.

Refusing to spend any money to make their house rentable - even gas safety checks were considered over the top.

Insisting on leaving all their old furniture in some of the rooms or not allowing use of the garage

Asking for flexible rental periods and wanting to leave the place on the market while it was rented out.

Insisting that tennants should allow viewings of the home with 2 hours notice at any point during the let.


The list goes on but suffice tosay if you are a sensible landlord (albeit an unwilling one) your place will rent out quickly.

BlameTheGame

'massive collapse in rental values' is very much exaggerated :rolleyes:

Not much change where i am.

brit1234

stevetodd wrote: »

Where on earth did they find someone who gets less rent now than in 1990 (thats 19 years ago!), frankly I don't believe it. Rents have just about doubled in my properties since 1991 (I didn't enter the market until then). In fact they have more than doubled (but to be fair I discounted the very good improvements that I have made since then).

Rents have been traditonally higher as a percentage value of the property. Now due to an oversupply of rental property and increased unemployment rents are falling fast and void periods are increasing.

Back in the 1990s people earned a far higher rental income. As house prices rose this was heavily diminished and so the experts then said it was all about equity growth instead. Now thats gone into reverse investors want to bail out but they can't sell and are being repossessed.

:eek:

stevetodd wrote: »

If he has owned the properties since 1990 and enjoyed the rising market, how come he is in equity trouble to the point of repossession, he doesn't strike me as very shrewd.

Its called gearing. He used his equity to buy further properties. Now prices are falling so fast huge amounts of investors are too heavily geared and going into negative equity, others haven't got enough equity to remortgage and are facing higher costs. This is why buy to let repossessions are rocketing at a faster rate compared to other repossessions.

:eek:

Radiantsoul

I haven't really seen rental rates dropping that rapidly to be honest.

brit1234

Radiantsoul wrote: »

I haven't really seen rental rates dropping that rapidly to be honest.

Go to Manchester, Leeds, Liverpool or London (biggest falls) then.

martinman3

brit1234 wrote: »

On todays Working Lunch a struggling long term landlord and how he tries to survive.

Summary

1. 4 out of 13 properties empty.
2. Rents slashed to get tenants in
3. 1990 rent £1700, now lucky to get £1300 a month
4. No upside for 5-7 years
5. Banks want to repossess flats
6. Can't sell properties
7. When to buy again, 3-4 years for the property market to bottom out
8. Large waves of forced sales.

Who is he kidding ?
Those two properties in the clip were 2 bedroom flats/maisonettes, no way were they let for £1700 in 1990. Would be a miracle if he got £1300, £800-£900 a month is more realistic.

p.s. I would suggest that the reason he is struggling is that he was caught out by the oil price collapse.

stevetodd

brit1234 wrote: »

Rents have been traditonally higher as a percentage value of the property. Now due to an oversupply of rental property and increased unemployment rents are falling fast and void periods are increasing.

Back in the 1990s people earned a far higher rental income. As house prices rose this was heavily diminished and so the experts then said it was all about equity growth instead. Now thats gone into reverse investors want to bail out but they can't sell and are being repossessed.

:eek:

Its called gearing. He used his equity to buy further properties. Now prices are falling so fast huge amounts of investors are too heavily geared and going into negative equity, others haven't got enough equity to remortgage and are facing higher costs. This is why buy to let repossessions are rocketing at a faster rate compared to other repossessions.

:eek:

You don't have to explain the property market to me I have been a chartered surveyor since 1992 and have owned several investment properties (and also sold a few) since 1991. Although I think after what you have written you need to explain some things to you:

1. To suggest rents were higher in the 90's (the article was talking about total rents not perecentages) is just ridicleous and frankly too obviously wrong to for me to even have to explain.
2. They weren't experts they were misguided fools at best buying investment property at prices that were too high and didn't stack up financially.