Rents fall at fastest rate on record

geoffky

The latest lettings market survey from the Royal Institution of Chartered Surveyors (Rics) shows that 55pc more estate agents reported a fall in rents rather than a rise in the three months to April, up from 48pc.
This is the largest negative result since the Rics survey began in 1999 and reflects an oversupply on the market as homeowners look to let properties rather than sell them during the downturn.


some agents claimed that rents have fallen by up to 30pc from their peak.
However, the report also indicates increasing optimism among chartered surveyors, with a fall in the proportion forecasting further rental declines. A total of 25pc more agents are expecting values to decrease further, an improvement on the 41pc who saw rents dropping in the previous three months.
This is because of increasing signs the housing market is recovering and the sale of a property is easier and more viable.
Jeremy Leaf, a Rics spokesman, said: "Property transactions are starting to rise from very low levels and the influx of supply in the rental market has slowed as vendors begin to find buyers.
"Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals. Even so, the downward pressure on rents should ease in the coming months, providing some good news for landlords.
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/5604739/Rents-fall-at-fastest-rate-on-record.html

macaque_2

geoffky wrote: »

The latest lettings market survey from the Royal Institution of Chartered Surveyors (Rics) shows that 55pc more estate agents reported a fall in rents rather than a rise in the three months to April, up from 48pc.
This is the largest negative result since the Rics survey began in 1999 and reflects an oversupply on the market as homeowners look to let properties rather than sell them during the downturn.


some agents claimed that rents have fallen by up to 30pc from their peak.
However, the report also indicates increasing optimism among chartered surveyors, with a fall in the proportion forecasting further rental declines. A total of 25pc more agents are expecting values to decrease further, an improvement on the 41pc who saw rents dropping in the previous three months.
This is because of increasing signs the housing market is recovering and the sale of a property is easier and more viable.
Jeremy Leaf, a Rics spokesman, said: "Property transactions are starting to rise from very low levels and the influx of supply in the rental market has slowed as vendors begin to find buyers.
"Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals. Even so, the downward pressure on rents should ease in the coming months, providing some good news for landlords.
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/5604739/Rents-fall-at-fastest-rate-on-record.html

Q: What did the mammoth say when he stepped into the tar pit?

A: Its a bit sticky at the moment but I'm in it for the long term.

bluey890

Pressure on rents should be easing in coming months. The outlook for landlords seems more optimistic than I thought...


"Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals. Even so, the downward pressure on rents should ease in the coming months providing some good news for landlords."

Surveyors see a decline in rents


Tenants have been able to negotiate better deals

The proportion of surveyors reporting a fall in rent in the three months to the end of April hit its highest since the poll of surveyors began in 1999.
The Royal Institution of Chartered Surveyors' (Rics) found that 55% more surveyors and estate agents reported a fall in rents than a rise.
The fall was most marked in Scotland and in London.
The survey suggested that rents would continue to fall in the coming months, but at a slower rate.
Demand
A balance of 25% of surveyors expected rents to fall during the coming quarter, nearly half the 41% who predicted further falls during the previous three months.
Surveyors' views on property yields suggested that rents were falling at a faster rate than house prices.
"Property transactions are starting to rise from very low levels and the influx of supply in the rental market has slowed as vendors begin to find buyers," said Rics spokesman Jeremy Leaf.
"Demand for rental property is still high but tenants have been able to take advantage of a flooded market to negotiate lower deals. Even so, the downward pressure on rents should ease in the coming months providing some good news for landlords."
http://news.bbc.co.uk/1/hi/business/8113413.stm

1echidna

Let 'em fall, let 'em fall, let 'em fall

novazombie

How could rents not fall?

Unemployment up up up, wages falling etc etc.


We still have a long way to fall both rents and house prices.

crazygaijin

geoffky wrote: »

some agents claimed that rents have fallen by up to 30pc from their peak.
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/5604739/Rents-fall-at-fastest-rate-on-record.html

I had a chat to a local agent in London and he was telling me that most of his rental property`s are over priced. The ones that do find good tenants have had to reduce a lot.

The area in NW11 is flooded with over pricedrental property`s. If they want to find good long term tenants they have to reduce and probably they will keep reducing rents as house prices fall as well.

Nylontokyo

If you want a good tenant now, yes you should lower the rent if they ask for it.

The next stage in this crisis is a flood of empty property`s with land lords lowering prices like crazy to just get someone in there before the bank takes it and sells it dirt cheap at auction.

blunt_crayon

Do you think it is easier to negotiate rents down as interest rates are so low? i.e. landlords will accept less so long as it covers their repayments?

lemonjelly

Nylontokyo wrote: »

If you want a good tenant now, yes you should lower the rent if they ask for it.

The next stage in this crisis is a flood of empty property`s with land lords lowering prices like crazy to just get someone in there before the bank takes it and sells it dirt cheap at auction.

The banks aren't taking repossession actions in the ways they have been in previous downturns though.

This is due to political issues, agreements to work with debt organisations (initiated by the government with the FSA), the number of void properties lenders already hold, the fear of creating further falls in house price/asset values, the hope we can ride this out, and the fact that there is hope there for some with the low mortgage rates.

BTW, didn't we have pretty much the same thread yesterday?

chucky

blunt_crayon wrote: »

Do you think it is easier to negotiate rents down as interest rates are so low? i.e. landlords will accept less so long as it covers their repayments?

yes - as long as they're on a variable/tracker rate or their LTV allows it.

SilverStandard

It wont be until IRs go up a lot that we will see the bid falls in rents.

LLords will be desperate to get someone in there quickly before the bank takes it off them and flips it quick in an auction for hardly anything. Then sends the old LL the bill for the remainder.