Rents to "Rise Sharply"

chucky

Thrugelmir wrote: »

Some days are bad news days for the property bulls......

that all depends if the property bear is not very intelligent and doesn't see the elephant in the room

Average rental yields on assured short-hold tenancies have risen from a 2006 low of 5.08 per cent and are currently at 7.96 per cent in London and highest at 8.97 per cent in the Midlands, Wales and the South West, according to Allsop. The national average return on rental property was 8.5 per cent, the auctioneer said

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6889734.ece

nembot

chucky wrote: »

that all depends if the property bear is not very intelligent and doesn't see the elephant in the room

Average rental yields on assured short-hold tenancies have risen from a 2006 low of 5.08 per cent and are currently at 7.96 per cent in London and highest at 8.97 per cent in the Midlands, Wales and the South West, according to Allsop. The national average return on rental property was 8.5 per cent, the auctioneer said


http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6889734.ece

That wouldn't be Kirsty Allsop, by any chance?

I live in Wales and with the rent on this place, the yield would be nowhere near 8.97% - in fact with a quick calculation, it'd be 3%...

That's with a £130,000 reduction from peak, when it went to auction earlier this year.

So much for that Kirsty Corker, okay... next one please?

:T :T

PasturesNew

My landlord gets 6% from me on what he paid ... 8% on what it's worth.
This just means the price of the property has gone down, I still pay the same rent.

abaxas

Good luck to those putting up prices in a recession. If there is a true lack of supply then it should work, if there isnt.... HA HA HA HA!

Hint : most parts of the UK do not have any sort of shortage.

the_ash_and_the_oak

Not sure about rest of UK but there is no rental shortage in London (shown by static rents over the last 7 years or so). I have to admit I'd be really surprised if rents started rising here now (without equivalent movements in salary but even with, given there have been some salary rises during this period)

doire_2

HAMISH_MCTAVISH wrote: »

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6890420.ece

Given that buying is already cheaper than renting in all regions except London.... (although granted a decent deposit is required)

Rising rents can only further help swing the balance in favour of purchasers.

Hmmm i can rent a decent house in my area for £100 per week. A mortgage on that house would cost me over £700 per month.

How is buying cheaper? If i bought now then i would also have to fit the cost of any repairs. Added to this is rates of £500-£700 per year

Wookster

doire wrote: »

Hmmm i can rent a decent house in my area for £100 per week. A mortgage on that house would cost me over £700 per month.

How is buying cheaper? If i bought now then i would also have to fit the cost of any repairs. Added to this is rates of £500-£700 per year

Hamish has a tendency to be economical with figures. Just like Brown's statement some time ago that zero spending was investment

chucknorris

doire wrote: »

Hmmm i can rent a decent house in my area for £100 per week. A mortgage on that house would cost me over £700 per month.

How is buying cheaper? If i bought now then i would also have to fit the cost of any repairs. Added to this is rates of £500-£700 per year

It only looks cheaper to you because you are fixated with year one costs. If it wasn't cheaper why would investors buy property to rent out? (although I hasten to add I would not buy an investment at the low yield you have cited in your example) They are certainly not doing it for charitable reasons.

It is cheaper because the ratio of rent and mortgage cost will change dramatically over time. The mortgage cost will only fluctuate with interest changes both up and down whereas the rent will certainly increase over the period of the typical 25 year mortgage.

the_ash_and_the_oak

chucknorris wrote: »

It only looks cheaper to you because you are fixated with year one costs. If it wasn't cheaper why would investors buy property to rent out? (although I hasten to add I would not buy an investment at the low yield you have cited in your example) They are certainly not doing it for charitable reasons.

It is cheaper because the ratio of rent and mortgage cost will change dramatically over time. The mortgage cost will only fluctuate with interest changes both up and down whereas the rent will certainly increase over the period of the typical 25 year mortgage.

While I see where you are coming from imo the difference is in the comparing rent w mortgage interest not with full mortgage. comparing with the interest section only is a utility-comparison, comparing with the full mortgage is comparing with a saving dimension also

totally hypothetical example
rent 600
mortgage 900 of which 700 is interest

to rent is cheaper by 100, not 300 - because 200 is going towards a form of saving/investment. the rent may go up and the interest down of course (or vice versa in a shorter timeframe). if the renter is putting an equivalent 200 (and the extra 100) into a different form of saving/investment then they are building up extra cash in a different form (it is only if that money is being squandered that they are losing)

purch

Rental Yield higher :j

Capital Value of Asset Lower :mad: