MSE News: High demand could push rental prices up

HAMISH_MCTAVISH

brit1234 wrote: »

Rents down 2 months in a row and house prices have been falling for 6-8 months.

Rents currently rising, and house prices rising in 3 of the last 4 major index releases.

Sorry Brit old bean, your hpc propaganda won't go unchallenged here any more.

Jimmy-p_3

Rents and House prices rising,,,,are you having a laugh????? Incase you did not know,,,we are in RECESSION, mortgage approval is down,,,LHA is down,,people getting made redundant

brit1234

HAMISH_MCTAVISH wrote: »

Rents currently rising, and house prices rising in 3 of the last 4 major index releases.

Sorry Brit old bean, your hpc propaganda won't go unchallenged here any more.

Don't need to tell fibs, I'm not you Hamish. My signature has the latest house price info and yes its down.

Oh for the rents:

U.K. Home Rents Fall for Second Month as Supply Surges, LSL Says
http://www.bloomberg.com/news/2011-02-18/u-k-home-rents-fall-for-second-month-as-supply-surges-lsl-property-says.html

theartfullodger

Had lunch with youngest son & his delightful G/F yesterday, good gastropub in East London (Bethnall Green). They are looking for 1 bed flat. Both employed, intelligent, housetrained. They have rented for 4-5 years already so understand "the game".

They advised almost all rental property is going "in a day" and agents ain't bothering to sell to tenants no more, just waiting to be contacted. And rents have gone up.

Advertised a house in the Highlands of Scotland within the last 2 weeks. Never had so much interest (normally such a limited area it's a bit quiet on the demand side usually..): Either I got the price too low (about what it rented for before) or there ain't nuffink out there...

Eton_Rifle

I rent out three houses and can't make sense of the rents.

The cheapest and most expensive houses are not rising in rent but are static yet the middle house has increased at each renewal as people get into bidding wars over it. The current tenant of this house even took it sight unseen and paid a holding deposit over the phone immediately.

I keep a close eye on the middle houses's village and its surrounding villages and am concluding that in that area, reasonably sized good period rental properties are going like hot cakes for pretty high rents.
At the other end of the scale, modern boxy houses, even of comparable size and location are not faring so well and I see their rents being reduced on Rightmove.

bigblackdog

as far as i can see there are plenty of properties on the market to rent , but must admit i do think they are a bit overpriced . i do agree therfore that the rents are going up , and if everyone puts the rent up people will have to pay it , no other choice .

Geenie

Eton_Rifle wrote: »

I rent out three houses and can't make sense of the rents.

The cheapest and most expensive houses are not rising in rent but are static yet the middle house has increased at each renewal as people get into bidding wars over it. The current tenant of this house even took it sight unseen and paid a holding deposit over the phone immediately.

I keep a close eye on the middle houses's village and its surrounding villages and am concluding that in that area, reasonably sized good period rental properties are going like hot cakes for pretty high rents.
At the other end of the scale, modern boxy houses, even of comparable size and location are not faring so well and I see their rents being reduced on Rightmove.

It is the same where I live. Village properties are over subscribed and the rents remain high and going up.

I keep seeing BTL being bandied about on threads like this, and LL's going under or experiencing difficulty, causing great glee to some on here.
Yet I read somewhere recently that only about 19% of rentals are mortgaged! This does seem quite low, but I would be interested to know how many rentals are BTL, as most around where I live are not, and so the LL's are not tied into a mortgage to dictate what rent they charge. Any one know the statistics on private or BTL rental properties in England and Wales?

BOBBIs_MUMMY

Total newbie to the rental game, we are hoping to obtain a btl mortgage on our current home and use the equity we have in the house to fund our new home (along with a mortgage) We currently live in a 3 bed detached with garage and gardens in Suffolk. It has been suggested that we can get £650 a month for our house, how can we tell if this is a realistic figure to ask or if we could in fact get more??

B_Blank

brit1234 wrote: »

Rents down 2 months in a row and house prices have been falling for 6-8 months.

Buy to Let represent the highest group in repossessions. Interest rates are set to rise, housing benefit is being cut, unemployment is rising and wages are frozen or being cut.

It doesn't look good for landlords like you Hamish, the fundamentals are against you. Capital appreciation deteriorating, rental % yields are still low compared to what they use to be. Also capital gains has gone up.

:rotfl:

You and Hamish both have valid points.

There is a shortage of housing, and that might stop an out and out crash, but a drop is coming when housing has decreased 6% in the last 6-8 months despite no cuts, lower inflation than is coming and low IR. When these all kick in there is only one way housing can go when they have been decreasing with all these factors weighed heavily in their favour. No boom will come because credit is too contrained, and it is likely to be constrained for a long while going foward. This destorys the housing shortage leading a boom theory, although the shortage will obviously help property somewhat, its obviously not going to be enough to cancel out the other factors.

Hamish is also correct on BTL people basically expanding last year due to low rates on savings, low IR and increasing rents. However these BTLers who jumped in during 2010 made a big mistake IMO. Capital gains tax going up was significant to the profitabilty of property as an investment, and this cannot be underestimated. Also IR will rise and rents will probably fall due to rising unemployment and general consumer tightness as people fear for their jobs. Also the housing benefit cuts (and general aim for the government to get value for its housing benefit money) could have a significant impact on the rental market, and will reduce the going rate for alot of rental properties. No longer are the government prepared, or able to pay whatever the landlords and agents want in housing benefit, they will want value for money.

All in all, entering BTL in 2010 would of been a major blunder. Rents will go down, and house prices will continue their slide.

B_Blank

BOBBIs_MUMMY wrote: »

Total newbie to the rental game, we are hoping to obtain a btl mortgage on our current home and use the equity we have in the house to fund our new home (along with a mortgage) We currently live in a 3 bed detached with garage and gardens in Suffolk. It has been suggested that we can get £650 a month for our house, how can we tell if this is a realistic figure to ask or if we could in fact get more??

remember to factor in:

1, Agent fees
2, Tax
3, capital gains tax
4, the property could sit empty for a long time
5, the checks you have to do to ensure the property is fit to live in (i.e. electric and gas checks)
6, repairs which you will have to do - which could ensure the property sits empty for longer (not covered by deposit as part of general wear and tear)
7, Stress from all of the above