Wannabe house buyers seeing rents rise

Malcolm.

Potential first-time buyers are facing rising rents as they wait to raise a deposit for a home, a survey has said.

Landlords raised their rents for the sixth consecutive month as demand increased and supply was squeezed, the poll by LSL Property Services found.

Average monthly rent amounted to £676, although this would pay for renting different-sized properties in different parts of the UK.

A home remains most people's biggest asset in the UK. The value of properties judged by house price surveys is under the microscope in a new study.

The Office for National Statistics is monitoring the different, officially-sanctioned house price surveys to ensure they do not give conflicting messages.

'Accurate'

The review was welcomed by one member of the industry.
Robert Bartlett, chief executive of estate agent Chesterton Humberts, said that it would be good to come up with a system that gave a "timely and accurate" indication of house prices in a local area.

"Prices vary enormously from property type and location," he said.

Analysis of the housing market by accountants PricewaterhouseCoopers suggested that there would be a 2% average real rise in house prices between 2010 and 2020.

However, this would represent a lower rate of increase relative to the average real UK house price growth of about 4% per year between 1984 and 2007 and about 3% per year between 1984 and 2010, it said.

Meanwhile, first-time buyers are still having to find a large deposit to get on the property ladder.

"The biggest issue is the lack of funding," said LSL's managing director David Newnes.

"Is is constraining first-time buyers and investor landlords from coming into the market because of the need for such an enormous deposit."

A number of "accidental landlords" - homeowners who tried to sell but were forced to let instead - were now selling up, reducing the amount of rental property available, he said.

Geography was also a factor in the rental market, with the average rent unlikely to be enough for a property in central London, but possibly enough for a semi-detached home in the Midlands.

HAMISH_MCTAVISH

Average rent now just £12 a month below peak, and rising......

Generali

http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=512527&in_page_id=8&position=moretopstories#ixzz0xEBZlwry

The research from LSL Property Services reveals that the average price to rent a property is now £676 a month – 2.3% higher than a year ago.

http://www.telegraph.co.uk/finance/economics/7949919/Bank-of-England-Governor-warns-that-Britons-face-higher-inflation-for-longer.html

Today's figures from the Office for National Statistics also showed that the Retail Price Index, a measure of inflation generally seen as the best gauge of the cost of living, was at 4.8% last month [for the year]

Real rents are falling. You'd expect the nominal price of just about everything to be rising with inflation at 5% and to the surprise of absolutely nobody except LSL and a couple of posters, nominal rents are rising!

The price of bananas will also be rising but you don't see the Banana Retailers Association sending out press releases crowing about it. Presumably they have employed an economist that understands the difference between nominal and real price changes.

Of course as average wages are also rising more slowly than the RPI potential FTBs will, on average, be going backwards. That seems to be a subtlety too far for LSL Property Services (owners of Your Move among others).

Barnetbear

I laughed a little when I read that, I have seen agents putting rents up 10% on To Lets in my area but they don't let. Where I am now the landlord is on for nearly 10% less than early '09, with only 1 viewer in weeks, once I'm gone it'll void for at least a month I reckon (was 4 months last time at this flat, 9 months the one I was at before).

twadge_face

"Wannabe house buyer"? Isn't that the pent-up demand which is meant to be underpinning price rises? LOL.

Perhaps they should settle for the zigazig. Ah.

Hold on:

A number of "accidental landlords" - homeowners who tried to sell but were forced to let instead - were now selling up, reducing the amount of rental property available, he said.

Another bit of evidence for increased supply in the sales market. Kerpow! :T

Barnetbear

...and still no viewers where I am, yet letting agents write letters to The Occupier begging for property to be let through them, whilst the area's long established and widely covered agency still has trouble even finding one viewer at a rent nearly 10% down on what was asked last year. That means most people think it's not in the ballpark of an offer.

Yet the agents on other places I'm trying to view are upping the asking rents there like a little conspiracy amongst themselves to try to drive rent prices up. So far it ain't working, no one's biting.

A quiet August or a slump in the rentals market? This is what's happening locally even WITH less rental supply than I have seen before. Imagine if a lot come up to let, it'll be a landlord killing field, perhaps that's already happened hence the low supply? Yet still no one wants this one! Got to scratch your head, if they're not wanted round here then where's the demand...?

Can only conclude everyone's on holiday - or lost their job. Got to be one of the two, it's just way too quiet.

Malcolm.

Generali wrote: »

Real rents are falling.

RPI has a purpose, however I feel that comparing rental increases to the cost of a tank of petrol or a loaf of bread adds little value. A better comparison would be against the NAEI or the opportunity cost e.g. change in the nominal cost of mortgage repayments.

Generali wrote: »

You'd expect the nominal price of just about everything to be rising with inflation at 5%

I think this is an over generalisation. Ignoring weighting, only 50% of the basket needs to have increased at or above 5%, and even then, no one individual item needs be anywhere near the 5% figure.

PasturesNew

The trouble, as I see it, is that at the bottom end of the market (yep, that's where I'd be renting), you can't choose a cheaper place.

If rents rise and people can't afford them, we'll all just go back to doing what we used to do: not moving out from home, moving back in with the parents from time to time, dossing on mates' sofas, living in vans. If the money's not there, we can't pay it. If you work for your money, you'll choose not to pay higher rents, you'll find some other way to live.

Renting will soon become the luxury of the rich or the jobless.

Barnetbear

PasturesNew wrote: »

The trouble, as I see it, is that at the bottom end of the market (yep, that's where I'd be renting), you can't choose a cheaper place.

If rents rise and people can't afford them, we'll all just go back to doing what we used to do: not moving out from home, moving back in with the parents from time to time, dossing on mates' sofas, living in vans. If the money's not there, we can't pay it. If you work for your money, you'll choose not to pay higher rents, you'll find some other way to live.

Renting will soon become the luxury of the rich or the jobless.

I wish I had parents to move in with, sigh...!

PasturesNew

Barnetbear wrote: »

I wish I had parents to move in with, sigh...!

When I move out of here I can rent you mine!

Malcolm.

PasturesNew wrote: »

The trouble, as I see it, is that at the bottom end of the market (yep, that's where I'd be renting), you can't choose a cheaper place.

If rents rise and people can't afford them, we'll all just go back to doing what we used to do: not moving out from home, moving back in with the parents from time to time, dossing on mates' sofas, living in vans. If the money's not there, we can't pay it. If you work for your money, you'll choose not to pay higher rents, you'll find some other way to live.

Renting will soon become the luxury of the rich or the jobless.

I agree. I think this is also what Hamish has been saying, the effect of a population increase without an accompanying house building programme.