Buy to let: double whammy for amateur landlords as flat rents fall

carolt

Excellent advice - so, what do people have to say about the fact that rents for flats are falling?

Tragic, isn't it?

I'm looking forward to my rent dropping very, very soon - don't believe the hype - rents for houses have dropped too.

Pobby

Well where I am it stands to reason that rents will fall. So much btl that tenants have a big choice. I see quite a lot of " to rent " boards about. Loads of semi completed new builds. Think about those who bought off plan, oouch.

Pssst

I was driving round a development of very smart stone built detached and semis today. they are about 3 years old. It might be considered to be a "posh" estate.

A few things troubled me...

A sprinkling of for sale signs

A number of To Let signs

A house with a bit of A4 stuck in the window giving notice of removal of chattels

It seems that there might be a mix of repo fever and BTL blight setting in in suburbia.

TBH,if i lived on such a development,id worry about to let signs going up.

I might then stick up a for sale sign.

julieq

Rents have gone down, what, 5% from the peak?

Mortgage repayments have gone down by many times that amount.

It's about the best time there has ever been to be a BTL landlord. Occupancy rates are high, costs are low, profits are high. It's one of life's amusing ironies in a way, the crash is actually beneficial to BTL landlords because it increases yields massively where what appeared to be happening only a year or so ago was stagnating prices so no capital growth, but highish interest rates because of fuel based inflation.

That would have killed BTL landlords because at that time rental income was way below mortgage costs and they needed capital growth. There's never been a problem with occupancy rates.

Anyway, I doubt you'll be told. Some people wouldn't recognize an opportunity if it was 200 feet high and was waving a big red sign saying "I am an opportunity".

ad44downey

carolt wrote: »

http://www.telegraph.co.uk/finance/personalfinance/investing/5241226/Buy-to-let-Double-whammy-for-amateur-landlords-as-flat-rents-fall.html

Rents for flats have fallen for the sixth month in row in another blow for amateur landlords who bought new build flats in the hope of making a quick killing.

Amateurs landlords is a euphemism for chancers who didn't have a clue what they were doing.

mumps

Must depend on where you are. My tenant moved out last week of March. Agent wanted to market straight away and I said give me a week to go in and tidy up. She phoned me back and said someone had just phoned to ask if they had a flat in the area and ours was ideal. Again said as I had visitors staying would she give me a few days. On the Monday I phoned her to say I had checked flat out cleaned up etc. By the Friday original woman and another wanted it, one went straight to cash point and paid her deposit and filled in forms and was in as soon as refs sorted. Same rent as we let it for last May. As my mortgage is considerably less than it was I am happy.

Thrugelmir

julieq wrote: »

Rents have gone down, what, 5% from the peak?

Mortgage repayments have gone down by many times that amount.

It's about the best time there has ever been to be a BTL landlord. Occupancy rates are high, costs are low, profits are high. It's one of life's amusing ironies in a way, the crash is actually beneficial to BTL landlords because it increases yields massively where what appeared to be happening only a year or so ago was stagnating prices so no capital growth, but highish interest rates because of fuel based inflation.

That would have killed BTL landlords because at that time rental income was way below mortgage costs and they needed capital growth. There's never been a problem with occupancy rates.

Anyway, I doubt you'll be told. Some people wouldn't recognize an opportunity if it was 200 feet high and was waving a big red sign saying "I am an opportunity".

Leveraged BTL investors are going to face a problem once their current mortgage deals expire. Base rates may be low but banks and building societies are already pricing in further repossession losses from the downturn in the economy, the need to attract deposits and the higher levies that are required to fund FSA.

Now is a great time for cash buyers in the property market. This is the lull before the storm. I am waiting on the shore ready to pick up the pieces ( and not property investments I should add).

rent_and_buy

carolt wrote: »

Excellent advice - so, what do people have to say about the fact that rents for flats are falling?

Tragic, isn't it?

I'm looking forward to my rent dropping very, very soon - don't believe the hype - rents for houses have dropped too.

A lot of rents for flats have gone down in price its because there is that many of them people have to accept the low rents, my brother in law has just got a lovely apartment in a massive block, but half of the apartments are empty, if they want to fill them then they will have to lower the rents.

I think a lot of them have been built by investors who where being greedy, likewise people who thought property was a quick earner so jumped on the band wagon.

Its a shame, but for everyones downfall, someone else will benefit, i suppose if you are renting a flat now its great news, but if you own one and its empty it could become a nightmare.

I may become a landlord in the future, i dont know yet, but it wont be for financial gain it will be so i can move to a bigger property, if all the greedy people who bought extra properties and mortgaged themselve up to the hilt to do so didnt, we probably wouldnt be in the mess we are now.

Snooze

Dunno where these rents are supposedly dropping but it certainly ain't happening in Leeds. Autumn last year they showed signs of dropping, especially the city centre 'boxes' that no-one wants but looking on rightmove again now they're all back up at £500-600/month bracket (they dropped to around £400-450 for the bulk). Doesn't make any sense.

Even the rental board on gumtree for Leeds (a good mix of private LL and agents) is showing significantly increased prices to 6-12 months ago. I mean £500 a month for a 2 bed mid terrace in the middle of Beeston or Harehills?!? They're off their rockers. :rolleyes:

Rob

penguine

As unemployment continues to rise it seems inevitable that rents will keep falling, and in flats faster than in houses. Single people living in rented flats will be the first to move back home with family or to house share once they lose their salary or have to take a lower paid job.