MSE News: High demand could push rental prices up

HAMISH_MCTAVISH

B_Blank wrote: »

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

Rents are rising though, and house prices have risen on three out of the last four indices.

There will be no significant falls in prices. Minor fluctuations up and down, as we are seeing now.

And rents will continue to soar. Simple supply and demand.

FATBALLZ

HAMISH_MCTAVISH wrote: »

Rents are rising though, and house prices have risen on three out of the last four indices.

There will be no significant falls in prices. Minor fluctuations up and down, as we are seeing now.

And rents will continue to soar. Simple supply and demand.

I'm paying less rent now than I was 5 years ago. Happy days.:)

James_N

B_Blank wrote: »

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.

Keeping on repeating your wish-mantra as some article of faith won't make it any more true. Rents are still rising, especially for quality in good locations. Not all BTL landlords are sitting on flats they can't let in dead city centres. Even entering BTL in 2010 would have been right if the choice of property was right in the first place.

tbs624

HAMISH_MCTAVISH wrote: »

This is record breaking stuff mate, rental supply down 18% in just one year......

That's not "rental supply down 18%" btw it's the number of rental properties available on RM down 18%. Totally different. Many LLs never use RM

Quotes from these "surveys" get passed around and duly extrapolated. The LL associations put out surveys which fail to clearly state that their figures come from a survey of only their members, not all of whom respond. Headlines then say, for example "50% of LLs...." as if this meant "50% of all LLs".

There is of course a correlation between high rents and rent arrears. But , hey, let's talk those rent raises up .........

As the LHA reductions begin to bite, not only are Ts going to struggle but obviously their LLs will too.