Wannabe house buyers seeing rents rise

michaels

And I thought you were a married woman...

...good to have you back Carol, things have been much to boring and right wing without you.

carolt wrote: »

How sad - having got back from holiday, I am struck forcibly with how lousy our country is in many respects.

Lots of things I like about England usually, but a couple of weeks in Spain doesn't half remind you of some of the things they do better elsewhere.

Not just the weather.

macaque_2

Malcolm. wrote: »

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.

1. This was a poll, not an serious study.

2. The poll was conducted by LSL Property services. This what LSL said in a prospectus several years ago:

The Group’s revenues and produts are substantially dependent on the volume of sale, buy-to-let, mortgage and remortgage transactions in Great Britain’s residential property market and, to a lesser extent, on the value of such transactions.

Spin seems to get more contrived with each passind day.

Malcolm.

macaque wrote: »

1. This was a poll, not an serious study.

2. The poll was conducted by LSL Property services. This what LSL said in a prospectus several years ago:

Spin seems to get more contrived with each passind day.

I thought the 70% club were still on strike?

Dirk_Rambo

macaque wrote: »

1. This was a poll, not an serious study.

2. The poll was conducted by LSL Property services. This what LSL said in a prospectus several years ago:

yes you cant really listen to what estate agants say. they tell a awfull lot of porkies. i tihnk that might be why a few of them down the road from me got closed down

nickmason

carolt wrote: »

How sad - having got back from holiday, I am struck forcibly with how lousy our country is in many respects.

Lots of things I like about England usually, but a couple of weeks in Spain doesn't half remind you of some of the things they do better elsewhere.

Not just the weather.

A colleague was recently talking about going away to a place on the French/Spanish border, where they go every year, timing their holiday to coincide with a local fiesta. At this fiesta, a fire is made on the street in the town square, a whole cow is roasted on it, and the villagers set to with carving knives, feeding everyone around.

What struck me most about this wasn't the community spirit, but the fact that my other colleagues, to a person, bemoaned with great envy that you couldn't do it in this country. (And I work in the charity sector.)

Just think of how many rules that would break. The final irony, I suppose, is that the blaim for those rules tends to be heaped on the EU. But then that's another debate.

Generali

Malcolm. wrote: »

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.



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.

It's pretty normal to compare the changing cost of an item against the change in the overall cost of living to see whether the inflation adjusted price has risen or fallen.

Comparing rents to mortgages has a value of course but as it is time consuming and expensive to shift between renting and owning a property, the opportunity cost* it measures is of limited value as it is hard to realise the possible gain implied.

Your second point is only valid if inflation is being seen in only a couple sectors and that in most areas prices are static or falling. AFAIK, that is not the case so while it's a good point, it isn't particularly helpful when looking at these figures.



*Opportunity cost is an economic concept. The idea is that if you decide to buy something, you also decide not to buy anything else with that money effectively. The opportunity cost is the gain that you didn't make from buying the best possible alternative.

For example, if I spend £10 on going to the cinema rather than going to MacDonalds my opportunity cost is the happiness I have forsaken by not visiting MacDonalds.

IveSeenTheLight

Generali wrote: »

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!
..........................

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).

This is the point, how muchdid rents rise in comparison to wages.
It's probably not worth answering as then the debate would move on to whether the wages was based only on renters.

This is important as I would guess the majority of renters are potential FTBers and lower paid workers

zappahey

Generali wrote: »

For example, if I spend £10 on going to the cinema rather than going to MacDonalds my opportunity cost is the happiness I have forsaken by not visiting MacDonalds.

I would have thought that a was win-win situation but that might just be my inner-snob gland in action.

Malcolm.

Generali wrote: »

It's pretty normal to compare the changing cost of an item against the change in the overall cost of living to see whether the inflation adjusted price has risen or fallen.

I think NAEI is the better comparison.

Comparison with RPI is more appropriate for landlords who use the revenue for day to day living expenses.

Comparison with NAEI is appropriate for tenants who are looking at rent affordability whilst trying to save a deposit.

Can you explain why you feel RPI to be more valid?

neverdespairgirl

Generali wrote: »

For example, if I spend £10 on going to the cinema rather than going to MacDonalds my opportunity cost is the happiness I have forsaken by not visiting MacDonalds.

Opportunity cost in that situation - zero?