Rents Continue Rising

Wee_Willy_Harris

HAMISH_MCTAVISH wrote: »

Coming from someone that couldn't add 12 and 9.....

Alrighty then.




Seriously.....

What on earth do you think will happen to rents at the bottom end when a group of people that used to have access to 50% of houses on the market, now only has access to 30%?

As per the government quote:



Are you seriously trying to tell me that rents in that bottom 30% will not rise?

Regardless of the extra demand, they cannot rise because of where that demand has come from, ie those in receipt of LHA. Coupled with the obvious conclusion from your own "maths", that 70% of properties are above the LHA rate rather than the 50% previously, so you have a larger percentage of properties chasing the same number of renters and the downward pressure that would result, it is a pretty straightforward argument for deflation in the rental market. What will almost certainly happen is that those in the 30th to 50th percentile group will be forced to lower rents to capture their intended market. This will, of course, have a knock-on effect for those properties in the higher percentile bracket as they re-allign. Remember, many people aren't forced to rent, as you suggest, they choose to do so. If it becomes unaffordable, they will simply choose not to do so.

Wee_Willy_Harris

HAMISH_MCTAVISH wrote: »

What on earth do you think will happen to rents at the bottom end when a group of people that used to have access to 50% of houses on the market, now only has access to 30%?

Percentages and percentiles are very different. Take some time out, Hamish, to have a look into the difference and how it might make your current argument look like the rantings of a swivel eyed fool.

It is quite possible for more than 30% of properties to fall within the 30th percentile. In fact, mathematically (sorry) it is possible for 100% of properties to fall within the 30th percentile, even if the cheapest rent was £1 a week and the most expensive was £1000 a week. Let's see if you can get your hollow little head round that idea.

HAMISH_MCTAVISH

Wee_Willy_Harris wrote: »

Regardless of the extra demand, they cannot rise because of where that demand has come from, ie those in receipt of LHA.

False.

All rents below the 30th percentile can rise to the 30th percentile.

Coupled with the obvious conclusion from your own "maths", that 70% of properties are above the LHA rate rather than the 50% previously, so you have a larger percentage of properties chasing the same number of renters and the downward pressure that would result, it is a pretty straightforward argument for deflation in the rental market.

First of all, you don't have a greater number of properties chasing the same renters.

The influx of benefits claimants into 3 out of 10 properties, rather than the current 5 out of 10, will inevitably displace some of the existing private rental tenants up the ladder.

There is no choice.

And the gap between rents at the 30th and 50th percentile is so small, (an average of just £9 a week) it's unlikely to be a problem for the employed.

What will almost certainly happen is that those in the 30th to 50th percentile group will be forced to lower rents to capture their intended market. This will, of course, have a knock-on effect for those properties in the higher percentile bracket as they re-allign.

Highly unlikely.

Chances are the landlords will hold firm, and the private tenants displaced up the ladder will have to fork out the extra £9 per week.

Remember, many people aren't forced to rent, as you suggest, they choose to do so. If it becomes unaffordable, they will simply choose not to do so.

For most, the choice is either rent or buy.

Funnily enough, I wouldn't mind in the least if rising rents force more people to buy.

HAMISH_MCTAVISH

Wee_Willy_Harris wrote: »

It is quite possible for more than 30% of properties to fall within the 30th percentile. In fact, mathematically (sorry) it is possible for 100% of properties to fall within the 30th percentile, even if the cheapest rent was £1 a week and the most expensive was £1000 a week. Let's see if you can get your hollow little head round that idea.

Then you really need to contact the government and explain to them they're wrong.

As that's obviously not what they intend to do.

Once again from the government website:

About 3 in 10 properties for rent in the area should be affordable to people on Housing Benefit rather than 5 in 10 properties now.

The government is stating that the number of properties available to benefits claimants will drop from 50% to 30%.

Pretty obvious they are calculating the 30th percentile the same way I am.

Wee_Willy_Harris

HAMISH_MCTAVISH wrote: »

Then you really need to contact the government and explain to them they're wrong.

As that's obviously not what they intend to do.

Once again from the government website:

About 3 in 10 properties for rent in the area should be affordable to people on Housing Benefit rather than 5 in 10 properties now.

The government is stating that the number of properties available to benefits claimants will drop from 50% to 30%.

Pretty obvious they are calculating the 30th percentile the same way I am.

Just for the sake of clarity, as you seem to be arguing against yourself here, which argument would you like to tie your flag to?

Will those properties falling at or below the 30th percentile be faced with unprecedented demand due to the changes in LHA (as you have argued)? Or are the changes so small that it will make no difference (as you have argued)?

Wee_Willy_Harris

HAMISH_MCTAVISH wrote: »

False.

All rents below the 30th percentile can rise to the 30th percentile.

In the same way that all rents above the 30th percentile can fall to the 30th percentile. Just because you or I say it's possible, doesn't mean it will happen. At the introduction of LHA at the 50th percentile, all rents didn't rise to meet it, did they?

HAMISH_MCTAVISH wrote: »

First of all, you don't have a greater number of properties chasing the same renters.

The influx of benefits claimants into 3 out of 10 properties, rather than the current 5 out of 10, will inevitably displace some of the existing private rental tenants up the ladder.

I thought you said that they would all end up sharing flats, making fewer households and forcing rents down as demand diminishes. Remember also the changes to the SRR due next year. Another downward pressure.

HAMISH_MCTAVISH wrote: »

There is no choice.

And the gap between rents at the 30th and 50th percentile is so small, (an average of just £9 a week) it's unlikely to be a problem for the employed.

While the rest of us watch landlords run around chasing the shortfall from the "Council pays my rent" brigade... lol. It would only take a small rise in voids to sober you lot up.

HAMISH_MCTAVISH wrote: »

Highly unlikely.

Chances are the landlords will hold firm, and the private tenants displaced up the ladder will have to fork out the extra £9 per week.

For most, the choice is either rent or buy.

Funnily enough, I wouldn't mind in the least if rising rents force more people to buy.

Or, they could just stay wherever they are now and save their rent money. For the majority of first time renters, they do so out of choice, not necessity. There is always that third way, even if you haven't considered it.

DervProf

I wonder who will win this argument, a little willy or a big one ?

Please continue............

Graham_Devon

I think the conclusion is simple.

Everything that happens in the rental sector = rents rise.

Everything that happens in the house buying sector = house prices rise.

Doesn't matter if benefits fall, wages fall, people lose jobs, and remember, interest rate rises won't make a jot of difference (but by god, please do not put them up, please....think of the erm....economy)

Would that be a fair, and simple summary?

DervProf

Graham_Devon wrote: »

I think the conclusion is simple.

I'm not so sure.

All I know is it will be one of the willies.

DervProf

Graham_Devon wrote: »

I think the conclusion is simple.

Everything that happens in the rental sector = rents rise.

Everything that happens in the house buying sector = house prices rise.

Doesn't matter if benefits fall, wages fall, people lose jobs, and remember, interest rate rises won't make a jot of difference (but by god, please do not put them up, please....think of the erm....economy)

Would that be a fair, and simple summary?

And as far as your last question is concerned.

Yes.