Halifax down 0.5% MoM, 15% YoY

Harry_Powell

Thrugelmir wrote: »

The market will ultimatelty revert to normal. Rents will exceed mortgage costs in the future. Currently we have investors hanging on in the belief that property prices will recover rather than incurring a sizable loss on their investment.

As you say why buy now?

Watch the market though as there will be an opportune moment to buy.

I can't forsee a time when mortgage costs will be cheaper than right now (for those not on fixed rates), so why will rents exceed mortgage costs in the future if they don't right now?

As I say, in the SE (well, inner & outer London), properties are still so expensive that it appears that it'll always be cheaper to rent than to buy.

Thrugelmir

Harry_Powell wrote: »

I can't forsee a time when mortgage costs will be cheaper than right now (for those not on fixed rates), so why will rents exceed mortgage costs in the future if they don't right now?

As I say, in the SE (well, inner & outer London), properties are still so expensive that it appears that it'll always be cheaper to rent than to buy.

Higher interest rates will drive rents higher. As investors will either sell property to reinvest elsewhere or raise rents. The market has some unwinding to do from the excessess of the past 10 years. Property being illiquid as an investment means that it will take time. Unlike the stock market which responds in seconds to events.

chucky

Harry_Powell wrote: »

I can't forsee a time when mortgage costs will be cheaper than right now (for those not on fixed rates), so why will rents exceed mortgage costs in the future if they don't right now?

As I say, in the SE (well, inner & outer London), properties are still so expensive that it appears that it'll always be cheaper to rent than to buy.

property in London and the South-East cannot be measured or compared against national averages. in the last 20 years they have been and always will be above national averages regardless if they're in line with wages or not.

there are independant drivers of these prices that make them more expensive that do not affect the rest of the UK.

DaddyBear

Thrugelmir wrote: »

Higher interest rates will drive rents higher. As investors will either sell property to reinvest elsewhere or raise rents. The market has some unwinding to do from the excessess of the past 10 years. Property being illiquid as an investment means that it will take time. Unlike the stock market which responds in seconds to events.

(Un)fortunatley landlords may find it difficult to raise rents as we will still be in a recession. Rents are dictated by wages, not interest rates. They can try but this will lead to landlords either losing their tennants or tennants becoming unable to pay the rent.

Kenny4315

Rents are determined by supply and demand, rather than wages, also rents are determined by what other landlords are charging for the service. Wages has very little to do with it, at the end of the day its a business not a charity.

Thrugelmir

DaddyBear wrote: »

(Un)fortunatley landlords may find it difficult to raise rents as we will still be in a recession. Rents are dictated by wages, not interest rates. They can try but this will lead to landlords either losing their tennants or tennants becoming unable to pay the rent.

There are a considerable number of more recent BTL investors who will have little choice once interest rates rise.

Agree with your comments regarding wages. With wage falls being announced almost every day. Pressure remains on house prices

Graham_Devon

Kenny4315 wrote: »

Rents are determined by supply and demand, rather than wages, also rents are determined by what other landlords are charging for the service. Wages has very little to do with it, at the end of the day its a business not a charity.

Wages are what pay the rents. So of course they dictate prices to a large extent.

If all landlords put up their rents in a certain area tripple what they are now you'd find you have no payments being made, as wages cannot pay what you are asking.

If wages fell, you would have to factor this in or risk non payment.

carolt

Kenny4315 wrote: »

Rents are determined by supply and demand, rather than wages, also rents are determined by what other landlords are charging for the service. Wages has very little to do with it, at the end of the day its a business not a charity.

So what do you think creates demand?

If rents are too expensive, demand to rent will reduce, as staying at home, sharing with friends etc etc becomes more appealing.

Unlike buying, which is limited to what people can borrow, rents are limited to what people actually earn - no-one (no-one normal, anyway) borrows money to pay the rent, as there is no future gain to be made.

If people can't afford the rent, the property won't rent.

Simple as.

the_ash_and_the_oak

Kenny4315 wrote: »

Rents are determined by supply and demand, rather than wages, also rents are determined by what other landlords are charging for the service. Wages has very little to do with it, at the end of the day its a business not a charity.

Actually supply&demand, and wages, are the same thing in this case. The financial aspect of demand is created by wages. This is fairly fixed as no borrowing occurs to pay rent. This is why - certainly in London - wages and rents remained fairly static, while prices rocketed. (I appreciate there is a parallel arguments that an increasing population size was catered for by speculative apartment building)

bluey890

carolt wrote: »

I don't 'give my money' to a landlord, I pay my rent.

If not a monetary transaction. Exactly how do you make payment to your landlord?