Gazumping Returns - At least to London

Loughton_Monkey

hshen wrote: »

I would say it's just naturally what happens when demand goes up and supply doesn't.

Agreed. But there have been several doom and gloom merchants predicting that the rental market will 'floor' owing to the cut in housing benefit.

Anyway, it's going to put a lot more people in a conundrum. The more their rents go up, the more it will become patently obvious that buying is a lot cheaper. And yet their deposit saving will take a big hit because all their cash is going into rent. And then to rub salt in the wounds, by the time they've saved the deposit, house prices will be rocketing again.

MegaMiniMouse

The big difference between Gazumping on a purchase and Gazumping on a rental is that on a purchase, the seller takes the money and waves byebye. On a rental, the landlord and tenant have to carry on 'living with each other' - woe betide the landlord who rejects a 'high-quality/low-income' tenant in favour of a series of fly-by-nights

MMM

drc

What I don't understand (and I have asked this question before) is, if houses are not selling, aren't there more forced landlords and therefore more supply? Last time houses were not selling (think it was 2009) the supply of rental properties seemed to increase, pushing demand down. Why has that not happened now? What are all these people with 2 or more properties doing now that they cannot shift them?

hshen

drc wrote: »

What I don't understand (and I have asked this question before) is, if houses are not selling, aren't there more forced landlords and therefore more supply? Last time houses were not selling (think it was 2009) the supply of rental properties seemed to increase, pushing demand down. Why has that not happened now? What are all these people with 2 or more properties doing now that they cannot shift them?

I'm not sure if seller's who can't sell automatically turn into zombie LLs.

Interest rate is kept low enough to keep people going I guess.

drc

hshen wrote: »

I'm not sure if seller's who can't sell automatically turn into zombie LLs.

Interest rate is kept low enough to keep people going I guess.

I like that image . Dawn of the Dead.

Loughton_Monkey

drc wrote: »

What I don't understand (and I have asked this question before) is, if houses are not selling, aren't there more forced landlords and therefore more supply? Last time houses were not selling (think it was 2009) the supply of rental properties seemed to increase, pushing demand down. Why has that not happened now? What are all these people with 2 or more properties doing now that they cannot shift them?

There are two issues here. The first, and primary one, is that there are not enough houses for those who want them. Full stop. At least cetainly not of the 'type' people want. The population has exploded of late (primarily through immigration) and everyone needs somewhere to live.

The second issue is subsidiary to this. It is what people do in the meantime. And as far as I can see the only choices are (a) to stay living with mother (or wherever), (b) rent a place, or (c) buy a place. The current 'squeeze' seems to be on (b), and so they can only migrate to (a) or (b). As usual, people will migrate both ways, depending upon what they can afford. Market forces are wonderful.

The vast majority of people are in jobs, and will recognise with rents going up so much, buying (while they are cheap) is the option. The unfortunate few will cough up their rent, or migrate back to mother.

Prepare, also, to see a rise in the demand for cardboard boxes.

AD9898_2

No idea why anyone would gazump anything in London, it's nice for a visit but I'd sooner live in Afghanistan than there, you need a 100k a year job just to make it bareable and even then you probably couldn't swing a cat in a place you could afford, and your 50k motor would probably get vandalised whilst it parked up on the grass verge, as having a driveway or garage would mean you need to be on 150k+ a year.

HAMISH_MCTAVISH

drc wrote: »

What I don't understand (and I have asked this question before) is, if houses are not selling, aren't there more forced landlords and therefore more supply?

Not yet, or at least, not in large enough numbers yet to make a difference.

Supply in the sales market has only just started to dip last month.

This process should continue over the coming months though, and given the soaring rents it is logical to assume some people will just "rent it out instead".

Obviously this will then lead to rent price increases weakening, but sale prices strengthening.

Last time houses were not selling (think it was 2009) the supply of rental properties seemed to increase, pushing demand down. Why has that not happened now? What are all these people with 2 or more properties doing now that they cannot shift them?

I assume you mean "pushing rent prices down" rather than "pushing demand down".

But yes, there should now be an increase in rental supply as sale supply drops, IF sales prices continue to fall.

This will lessen the rate of rent inflation, and also strengthen sales prices.

But the downward pressure on rent should not be as big as last time, even if supply increases, because there are now roughly 500,000 more households in the UK chasing housing than there were just two years ago, but we only built 250,000 houses in that time....