'Bidding War' for homes to rent

Cleaver

http://www.bbc.co.uk/news/business-11796277

People looking for houses to rent in many parts of the UK are encountering a new hurdle in their hunt for a home.
Landlords, or more often their letting agents, are increasingly asking would-be tenants to compete by making "sealed bid" offers for the home they want.

The practice is relatively commonplace in the market to buy homes, but is seen as a new development in the rental sector.
The demand for rented property is rising during the mortgage drought.

Jacqueline Cooper and her fiancee James Fleming are a young professional couple who were suddenly faced with a move from Taplow in Berkshire when their landlord decided to sell up. The couple count themselves as lucky, having just managed to rent a small terraced house with a garden in nearby Windsor.

They finally won the day after repeatedly losing out to other home-seekers, all chasing every available property in the area.
But to win, they first had to put down a deposit and make a sealed bid and all against a deadline set by the letting agents.

Jacqueline had not even had time to see the house before they had to make the bid - she had to rely on her fiancee's opinion. She pointed out it was not just the price offered in the sealed bid that counted. The couple put in a bid close to the asking price, and have a small dog, which they were told was sometimes preferred by landlords to a couple with young children.

Many more families and individuals find they cannot afford or get mortgages, so they are having to compete against each other to secure a tenancy. London has experienced the biggest rise in rents, but other regions are not immune. More than a third of landlords surveyed by the National Landlords Association said they were seeing higher rents in Wales, Scotland and the North West of England.

Research to be published on Monday by the property website RightMove is expected to find that 55% of renters were "trapped" - wanting to leave rented accommodation, but finding themselves unable to do so.

I didn't see this story online - I was was watching BBC Breakfast this morning and they did a story on this. By far the best thing about it was a rather large and greasy estate agent in a pink shirt and braces on the phone to some renters telling them to up their bid. You lot would have loved it.

Anyway, I've highlighted one bit in the story. Even though there's a 'bidding war' and people are introducing sealed bids (apparently) they still ended up paying under the amount actually being asked.

I also smiled at the line that landlords prefer small dogs to children.

halight

Tenants' finances to be checked after two years

The government had already said it wanted to end council houses "for life" for anyone new coming into the system.

Link http://www.bbc.co.uk/news/uk-politics-11802378

Local authorities and housing associations would give tenants at least six months notice to move out if they were found to be no longer eligible for social housing.




There maybe even more looking to rent from private landlords. Puching prices up

halight

Are the asking prices set above what normal rent would be for a house of the same size in the same area? i.e. Is there any price fixing and price ramping going on?

amcluesent

>There maybe even more looking to rent from private landlords.<

That's Condem policy. Several large funds now embarking on built-to-let with business plans based on invoicing at the LHA ceiling for the area, so accommodation is of appropriate size/quality.

PasturesNew

I'd rather sleep in a van than get caught up in any kind of bidding frenzy for a pokey box. But the people in the photo look the posh sort, so maybe it's the posh sorts fighting it out for houses that'd best show off their twigs in vases.

Cleaver

PasturesNew wrote: »

But the people in the photo look the posh sort, so maybe it's the posh sorts fighting it out for houses that'd best show off their twigs in vases.

I laughed at this. Then realised that we have some twigs in a big vase in our bedroom. And they have fairy lights around them. Oh no!

HAMISH_MCTAVISH

The demand for rented property is rising during the mortgage drought.

Research to be published on Monday by the property website RightMove is expected to find that 55% of renters were "trapped" - wanting to leave rented accommodation, but finding themselves unable to do so.

Wow......

That's huge.

macaque_2

In terms of price, the rental market is much more fluid than the house selling market. At a time like this, it is inevitable that the renting market will be in turmoil. Very few people are buyin and, apart from a few 'reluctant landlords', the existing housing stock is just not geared up to cope with the transition from buying to renting.

In the long term, the rental market will have great difficulty in holding on to current prices. There are only a limited number of people who have the money (or inclination) to splash out £10k a year on a pokey flat. With rising living costs, increased unemployment and low wage inflation, the pool of rich renters is falling.

Apart from the comments above, I cannot help suspecting that there is some spin behind this headline. Five years ago, the property below would have rented out at over £2,200 a month. Today it is on at £1,700 a month.

http://www.primelocation.com/uk-property-to-rent/details/id/HGYT7296291/

Turnbull2000

Assetz predicted that many renters will face a huge burden of strongly rising rents over the next few years, with their disposable income ending up in a landlords bank account instead.

If the media push this hard enough (which they will), I can see letting agents kicking off a new trend of sealed bids as the standard application procedure - regardless of levels of interest. Double digit rent inflation over coming year is quite possible.

Procrastinator333

The strange thing is that in my part of town, the rightmove listings and prices are still comparable to 2 years ago.

Based on the rightmove listings, I actually think we could get a better property for the same money if we moved.

So something isn't quite right, either the story is being over played or the LA's are advertising properties that have already gone to get people on their books.

The only good thing here is that if our LL does ask for a rent increase I can point to these adverts as a reason not to raise the rent.

HAMISH_MCTAVISH

Turnbull2000 wrote: »

Assetz predicted that many renters will face a huge burden of strongly rising rents over the next few years, with their disposable income ending up in a landlords bank account instead.
.

It's been obvious for some time that rental inflation would be the story of the next few years.

With the UK adding 400,000 people every year, forming 250,000 new households, but building just 100,000 houses, inflation in housing costs is inevitable as people compete for scarce resources.

It has to go into either rental inflation or house price inflation.

And with the mortgage drought still artificially restraining purchase of housing and house prices, then rental inflation is the only possible outcome.