Buy to let rents suffer a big drop

mizzbiz

Yes you can see a lot of downward pressure on rents up here as there are so many BTL properties on the rental market now. Potential tenants seem to have the pick of places, particularly flats at the moment, which of course is causing landlords to drop rents.

I don't imagine if you are already locked into a contract that your landlord is going to offer you a reduction. Why on earth would he/she? But when you come back onto the market, you now have a lot of bargaining power, either with your old landlord (providing they are not in denial!) or with a huge array of new properties.

Thanks Brit, nice article.

socrates

mizzbiz wrote: »

Yes you can see a lot of downward pressure on rents up here as there are so many BTL properties on the rental market now. Potential tenants seem to have the pick of places, particularly flats at the moment, which of course is causing landlords to drop rents.

I don't imagine if you are already locked into a contract that your landlord is going to offer you a reduction. Why on earth would he/she? But when you come back onto the market, you now have a lot of bargaining power, either with your old landlord (providing they are not in denial!) or with a huge array of new properties.

Thanks Brit, nice article.

Lets say you LL does not play ball - then you have a whole host of costs associated with moving and hassle to go with it. Changing all your addresses etc etc

Its a bit of cat and mouse at the moment and very much dependent upon area.

brit1234

socrates wrote: »

Lets say you LL does not play ball - then you have a whole host of costs associated with moving and hassle to go with it. Changing all your addresses etc etc

Its a bit of cat and mouse at the moment and very much dependent upon area.

With ever more supply than rental demand and a year of falling rents, renters will be in powered and landlords weakened.

It doesn't cost much to hire a van for the day to move. I would do it for a better rented property for less money.

Either landlords improve their service or reduce their costs, from now on they are just going to have to work harder as rental surplus and void periods increase.

stevetodd

stonethrower wrote: »

If you are worried about wasting your time reading Brit1234 messages why did you bother responding to it

Why would I be worried? I simply didn't want to waste my time as I have done in the past reading Brit's links to articles. I responded because if he keeps doing it it needs to be said.

That said though I note that no one else has picked holes in his article, so I read it this morning. I don't buy into it as happening generally in London, it specifically mentions high rental areas ie City of London, Tower Hamlets and Canary Wharf, as well as Kensington & Chelsea and I strongly suspect that the rest of the market is hardly effected but obviously high rental falls and new builds that can't be sold so are rented are badly effected and having an effect on the AVERAGE rent figures and statistics. That's certainly my own personal experience of the Battersea market which I have not seen any falls in.

socrates

brit1234 wrote: »

With ever more supply than rental demand and a year of falling rents, renters will be in powered and landlords weakened.

It doesn't cost much to hire a van for the day to move. I would do it for a better rented property for less money.

Either landlords improve their service or reduce their costs, from now on they are just going to have to work harder as rental surplus and void periods increase.

My friend owns a letting agents in East London in the last 4 months one couple has moved for a reduced rent - they left a perfectly good flat and moved into a very grotty one with an extra room (study).

They are the only ones - every single other flat had their tenancies renewed with increases.

For £50 a month - how many are actually going to bother?

PasturesNew

socrates wrote: »

For £50 a month - how many are actually going to bother?

For £600/year how many would consider it?

MrFonzerelli

stevetodd wrote: »

Sorry but after wasting my time reading your previous posts (and the links) I have learnt not to bother as they are a complete waste of time, so I haven't bothered reading this one. Your posts are usually just pathetic nonsense. I'll leave it to someone else to find the flaws.

ps nearly forgot to mention on just 4.5 rental properties my interest payments have come down by 24k a year (just a little update on the BTL market)

Do you feel the high yields on BTL may be an indicator of high risk?

I've always thought that a high yield usually causes more people to enter the market until it re balances.

I've not seen this happening yet.

socrates

PasturesNew wrote: »

For £600/year how many would consider it?

Deduct the cost of the van and all the time and effort to change bills - mail diversion costs.

Changing internet connection and cable/sky tv costs plus loads of other things I cannot even think of.

I don't think so!

RomansProperties

We normally rent studio and 1 bed flats in converted houses.
If a flat has been empty for more than 1 week we will drop the rent by £5 to get it left if the tenant wants.
Note we have also never increased a persons rent, only changed it when they have moved on. Its worth taking less from good trusted tenant.
We are noticing very good demand but we are not letting fancy city centre flats or 2-4 bed houses.
Our property is clean and basic and the only real way to get cheaper accomodation is the rent rooms in shared houses.
We have also recently let 18 flats to the council for Homeless and Drug Intervention people.
They are paying quite a bit over the normal rent for a private tenant

stevetodd

MrFonzerelli wrote: »

Do you feel the high yields on BTL may be an indicator of high risk?

I've always thought that a high yield usually causes more people to enter the market until it re balances.

I've not seen this happening yet.

I live in Dorking where the rental yields are pathetically low, much lower than London (where I own some BL's), that difference is merely related to demand. I don't think risk plays a significant factor in resdential yields as it does in commercial property. Residential yields I think are merely a product of the demand for rentals creating a rental price and the demand for sales creating the purchase price giving you a particular yield, unlike the commercial market where risk has a very significant part to play in valuing the rent and thus prime properties have a lower yield to reflect the lower risk.

There are of course things you can do to increase the yield, like Romansproperties who subdivides, that however is much involved than simply buying somewhere and renting it out.

However there will be a point when prices fall low enough LL's will start to buy attracted by the higher yields created by falling prices.