rents on an upward trajectory

lemonjelly

http://www.bbc.co.uk/news/business-12637242

will this lead to an increase in FTB's?

Will it lead to an increased demand for mortgages?

Or is it all a load of VI hogwash?

doire_2

It is unlikely that finance [STRIKE]100%, 125%, self cert, liar loans [/STRIKE]for first-time buyers will become much more readily available, while uncertainty over the economy may also deter potential homebuyers," said Rics spokesman Jeremy Leaf

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HAMISH_MCTAVISH

lemonjelly wrote: »

will this lead to an increase in FTB's?

It can't, as the reason for the shortage of FTB's is mortgage rationing.

Will it lead to an increased demand for mortgages?

The demand for mortgages far outweighs supply already, hence the mortgage rationing still crippling the market.

Or is it all a load of VI hogwash?

It's simple supply and demand.

There are insufficient houses for the population. It's why prices rose, and it's why rents are now soaring due primarily to mortgage rationing preventing people from buying.

Surveyors in all areas of Britain expected rents to continue to rise in the three months to April.

"It is unlikely that finance for first-time buyers will become much more readily available, while uncertainty over the economy may also deter potential homebuyers," said Rics spokesman Jeremy Leaf.

"As a result, demand for property to rent will remain strong and in all probability will continue to outstrip supply. In this environment, rents will remain on an upward trajectory adding to the pressure on many households whose incomes are already being squeezed by rising inflation prices and the hike in VAT

There is only one way to permanently lower housing costs......

BUILD MORE HOUSES.

Absent that, either rents or house prices or both will continue to rise, depending on the lending restrictions in place at the time and consequent swing of supply and demand between the two.

ultrawomble

Why are surveyors consulted over rents?

Graham_Devon

Will just lead to further debt problems if you ask me, as people turn to loans and credit cards to get through the months.

Nikel

Will make saving for that deposit even harder...

IveSeenTheLight

Nikel wrote: »

Will make saving for that deposit even harder...

I've said before, what were likely to see is a reduction in owner occupancy percentages to be replaced by an increase in people renting.
Going back to generations of old and how it is in mainland Europe.

Not ideal I know, but unless there is substantially more properties built, there will be no catalist for change.

Graham_Devon

IveSeenTheLight wrote: »

Not ideal I know, but unless there is substantially more properties built, there will be no catalist for change.

Interest rates will be a pretty substantial catalist if you ask me.

Even estate agents won't embarass themselves any longer by denying rate rises will have a massive effect and prices have been held up by 0.5% base rates.

ultrawomble

Nikel wrote: »

Will make saving for that deposit even harder...

If you believe the source. What do surveyors know of rental prices? I guess that fewer properties to survey means lower income. What better way to encourage people to buy than by talking up rents.

the.ciscokid

HAMISH_MCTAVISH wrote: »

The demand for mortgages far outweighs supply already, hence the mortgage rationing still crippling the market.

So as demand for debt continues to grow, that leads to an increase in cost of debt, or in other words interest rate rises. This in turn brings the price of the asset down (if debt is required for said asset).

Or are you saying interest rates will increase, but so will house prices?

Rents are not soaring btw.

Mallotum_X

HAMISH_MCTAVISH wrote: »

There is only one way to permanently lower housing costs......

BUILD MORE HOUSES.

Absent that, either rents or house prices or both will continue to rise, depending on the lending restrictions in place at the time and consequent swing of supply and demand between the two.

Prices increased for a variety of reasons, but one thing to remember was desire was turned into demand for many though the relaxation of lending.

This relaxed lending allowed people more money to compete and allowed prices to rise. Without the increaed credit available prices on many properties could not have risen so much compared to wages etc.

Demand without the ability to pay is not real demand. The banks allowed people the ability to pay higher prices. Sellers expected more and the amature investors all thought they would make a killing. Once a market like that gets going its self fullfilling as long as nothing comes along to stop it.