Rents Continue Rising

Loughton_Monkey

Cleaver wrote: »

.....If Tesco, Sainsbury's, Morrisons and ASDA all decide to put up the price of milk (and I'm not saying they are) then it's relatively easy to organise. It's not really that easy for hundreds of thousands of landlords to all decide to all put up their prices.

.... that would be an illegal cartel. So clearly it doesn't happen.

Cleaver wrote: »

Having said all this, obviously if Tesco just decide to charge more for milk for no reason, and a landlord decides to put up his rent for no reason, then I guess you could label both as 'profiteering'. But then if someone buys the milk, and another person rents the property, it's fairly clear that they priced their product correctly within the market place in which they operated.

Not strictly true. If Tesco sells 1,000 pints of milk a day, with 10 pence profit on each, they make £100 a day. If they put the price up by a penny, they may sell only 850 a day. Total profit £93.50.

If the landlord puts his price up from £500 a month to £550 a month, then that is 'profiteering' right up to the point that the tenant moves out. After that, it's 'lossetiering'.

Cleaver wrote: »

As a final point could I ask people not to buy stuff from Tesco? They pull the ears off cows and stub cigarettes out on lambs, amongst lots of other henious things.*Allegedly.

They do indeed. It is really offputting to see this happen right in front of the Deli counter. That's why I go to Sainsbury. OK, they don't fill the shelves round my way. But they DO carve babies just by the fish counter. I am an animal lover but cannot stand children. I have recommended to them that they should not just butcher babies, but toddlers and up to 8 year olds as well.

Morrisons sell baby-mince. My dog absolutely loves it!

geneer

julieq wrote: »

Geneer, your c0ck

Clearly a fraudian slip Jules.
One minor correction, and its clear your subconscious is just screaming.
Cor, its just like one of those romantic comedys innit.

geneer

julieq wrote: »

Geneer, I want you, renters don't move into houses nobody owns.

The demand for housing remains unchanged if someone choses to rent rather than buy. If more people choose to rent than choose to buy, rents go up (see thread title). This creates an investment opportunity based on the rental yield from the house they live in, so it increases in value.

In fact, since landlords are by definition incremental to the number of houses needed for people to live in, creating a strong rented sector actually increases demand overall for purchases, because you have a new class of buyer. That is the entire argument of those claiming that BLT investors artificially stoked demand (I think the effect is small personally), so it's not even my argument. It's an HPC sponsored argument.

I know you won't understand that. I know you will be chasing me round the forum for weeks telling me you just won the argument because you are frankly too stupid to argue with and I stopped. But it remains the very simple truth.

And I still don't do carwashes. But you can have the car.

:rotfl::rotfl::rotfl:

Heres another simple truth Jules.
People either rent or own. Theres nothing earthshattering about that.

Your reductive simplistic model (which boils down to falling demand = rising prices) is comically incomplete. Reality is somewhat more complex.

Which I rather assume is the reason that despite demand for property falling from 2008 onwards, house prices have for much of the time had a downwards trajectory.

The market has an equilibrium.
Your wonderful world where its only BTL mortgages they're handing out like sweeties again isn't really going to be a major part of that.

And again, lets not forget that your model is reliant upon the desire of the BTL muppet to charge what they like, rather than the renters ability to pay.

HAMISH_MCTAVISH

geneer wrote: »

comically incomplete.

Yes..... Your arguments normally are.

But back to the topic at hand, lets look at the facts.

Ireland, the USA and the UK all suffered a catastrophic failure of the financial system leading to a house price crash. In all these countries, governments threw everything but the kitchen sink at addressing the problem.

ZIRP, liquidity assistance, bank bailouts, QE, support for homeowners, mortgage rescue schemes, etc etc etc.

The results were very different.

Ireland is down 45% from peak and still falling.

The USA is down 35% from peak and still falling.

The UK is down 11% from peak and currently stagnating.

The only significant difference is supply and demand. All three tried financial bailouts of epic proportions.

Vacant housing rates:

Ireland: 17% and rising

USA: 13% and rising

UK: 3% and falling

Funnily enough, in only one of those countries is rent also rising....

Care to guess which one geneer? (clue: it's not Ireland or the USA)

And again, lets not forget that your model is reliant upon the desire of the BTL muppet to charge what they like, rather than the renters ability to pay.

And when there simply aren't enough houses for the increasing number of people, the only possible outcome is that there will be more people per house. Thus more income per house. Thus an increased ability to pay higher rents. Which is exactly what we're seeing.

IveSeenTheLight

Out,_Vile_Jelly wrote: »

I've been there for over two years and I'm a she. I think the landlord likes having a tenant who keeps the garden immaculate. I can't understand the rubbish-strewn, weed-choked front gardens I walk past on my road. Why pay more for a garden flat and then watch it turn into an ugly jungle?

I don't believe there is any difference whether you are a he or a she.
I didn't question your gender.

But as you quite rightly confirmed my point, some landlords see the benefits of good tenants and therefore won't necessarily put up their rent.

I have one property that has been let for over 4 years.
Despite the market price increasing, I have not increased their rents once as I value them as tenants, looking after the property, steadfast payments etc.

My second property now turns over tenants every year (it was bought due to it's prime university location) and the rents have increased each year in between tenants.
I am considering not increasing this year as the outgoing tenants have recommended new tenants and I'm therefore saving on advertisement / finders fee costs.

In my VI area, the rental market just seem to be getting stronger and stronger.

julieq

God Geneer, you really are some way beyond dense.

Let's try it again: more people are chasing essentially fewer homes. Some of them are able to buy, some of them are able to rent. If fewer buy then more rent, OK?

If more rent, rents go up.

If rents go up, yields go up.

If yields go up, investors buy houses for rental. Therefore prices go up as a function of yield. This also introduces a new class of purchaser beyond someone who just wants to live in a house (remember HPC telling everyone how BTL put prices up for everyone? Well that's how it happens)

Falling demand for purchase does not imply falling demand for housing. That is really a very simple concept. And the proof is that rents are rising. People have to live somewhere, someone has to own the place they live.

Cleaver

DervProf wrote: »

You won't hear these things from most sensible, everyday folk.....

1. "Good, Electricity is going up in price".

2. "Hurray, Bread is going up in price".

3. "Fantastic, rent is going up in price."

1. People who are invested in electricity companies may cheer on increases in the price of electricity.

2. People who are invested in wheat or bread producing companies may cheer on increases in the price of bread.

3. People who rent out a property or invest in companies that rent out properties may cheer on increases in the price of rent.

It feels a bit more distasteful when it comes to property, but it's essentially the same thing. For most people it's a double edged sword. I'm invested in a few oil companies, so any increases in the price of oil probably makes me more money. But I don't really 'cheer it on'.

geneer

julieq wrote: »

God Geneer, you really are some way beyond dense.

Let's try it again: more people are chasing essentially fewer homes. Some of them are able to buy, some of them are able to rent. If fewer buy then more rent, OK?

If more rent, rents go up.

If rents go up, yields go up.

If yields go up, investors buy houses for rental. Therefore prices go up as a function of yield. This also introduces a new class of purchaser beyond someone who just wants to live in a house (remember HPC telling everyone how BTL put prices up for everyone? Well that's how it happens)

Falling demand for purchase does not imply falling demand for housing. That is really a very simple concept. And the proof is that rents are rising. People have to live somewhere, someone has to own the place they live.

Yet house prices have fallen and are falling.
Like I said.
Simplistic incomplete model.

I do like the idea that the BTL muppets are a new class of purchaser though. :rotfl:

I guess that ground breaking buy or rent scenario never existing until now.

geneer

HAMISH_MCTAVISH wrote: »

Yes..... Your arguments normally are....enough to send me scurrying away from the thread

Fixed that for you.

HAMISH_MCTAVISH wrote: »

But back to the topic at hand, lets look at the facts.

Ireland, the USA and the UK all suffered a catastrophic failure of the financial system leading to a house price crash. In all these countries, governments threw everything but the kitchen sink at addressing the problem.

ZIRP, liquidity assistance, bank bailouts, QE, support for homeowners, mortgage rescue schemes, etc etc etc.

The results were very different.

Ireland is down 45% from peak and still falling.

The USA is down 35% from peak and still falling.

The UK is down 11% from peak and currently stagnating.

The only significant difference is supply and demand. All three tried financial bailouts of epic proportions.

Vacant housing rates:

Ireland: 17% and rising

USA: 13% and rising

UK: 3% and falling

Funnily enough, in only one of those countries is rent also rising....

Care to guess which one geneer? (clue: it's not Ireland or the USA)




And when there simply aren't enough houses for the increasing number of people, the only possible outcome is that there will be more people per house. Thus more income per house. Thus an increased ability to pay higher rents. Which is exactly what we're seeing.

Sorry hamish, but you appear to be suggesting that higher rents as FTB wannabees are locked out of the market by both prices and mortgage requirements is somehow unexpected.

Its not.

And as the rental market finds a new equilibium, so to must the property market.

In which case, its all good. :T

I do like your conclusion that there will be more people per rental house.
Thats going to free up a disproportionate number of properties isn't it.
Tip, top. Thanks for pointing that out.

HAMISH_MCTAVISH

geneer wrote: »

I do like your conclusion that there will be more people per rental house.
Thats going to free up a disproportionate number of properties isn't it.
.

Wow.... The stupid is strong in this one......



Year one:

90 houses available for sale or rent, 100 buyers or renters.

Some must share.



Year two:

105 houses available for sale or rent, 120 buyers or renters, because population is growing faster than housebuilding can keep up.

More must share.



Remind me again, how does this "free up a disproportionate number of properties"?

It obviously doesn't.... Except of course in crazyperson land.