Rents Continue Rising

chucknorris

HAMISH_MCTAVISH wrote: »

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

Stupid might be a bit harsh, I think he is just not very shrewd. He reminds me of Jonathon Davies who comes accross as having some intelligence yet lacks good business sense and is a bit of a loser (it wouldn't entirely surprise me if he actually was Jonathan Davies).

Gorgeous_George

Stagnant house prices when inflation is 4% are not stagnant - they are falling in real terms.

I increased the rent that I charge in April 2009 by 7.1% but have not increased it since - and probably won't until April 2012 at the earliest providing it is paid on time(-ish) and my tenant continues to look after the property.

GG

IveSeenTheLight

Gorgeous_George wrote: »

Stagnant house prices when inflation is 4% are not stagnant - they are falling in real terms.

Only if you've had an equal or above wage rise to counter inflation.

People don't buy property in real terms, they buy at nominal prices.

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

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

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

I recently read a report (and linked in a post) about home ownership, net migration etc.

The report had shown that the levels of shares properties had over the years decreased.

Of course we can all relate to a time ala "The Broons" where there were multiple generations living under the same roof and much less single occupier properties.

What of course you are referring to is a gradual return (possibly only partially) to the generation before where more people shared and more people rented.

It stands to reason when there simply has not been enough properties built to suite the population of today and tomorrow.

Wee_Willy_Harris

Cleaver wrote: »

Let's say your rent to your landlord is £300 and that leaves you with £300 to spend. Your landlord now has £300 to spend in the economy and you have £300 to spend in the economy. Total available spend in the economy = £600.

Let's say your rent to your landlord is £600 and that leaves you with £0 to spend. Your landlord now has £600 to spend in the economy and you have £0 to spend in the economy. Total available spend in the economy = £600.

I'm not saying "yah, rents are going up!" by the way, I'm just pointing out that your argument about rents being high and this stopping spend in the economy is a bit flawed.

Well, no. We still have the BTL brigade convinced that the rent from one property can fund another, and so on, as they build their "property empire". So......

Let's say your rent to your landlord is £300 and that leaves you with £300 to spend. Your landlord now has £300 to spend on the BTL mortgage down the road and you have £300 to spend in the economy. Total available spend in the economy = £300.

Let's say your rent to your landlord is £600 and that leaves you with £0 to spend. Your landlord now has £600 to spend on the BTL mortgage down the road and you have £0 to spend in the economy. Total available spend in the economy = £0.

Wee_Willy_Harris

HAMISH_MCTAVISH wrote: »

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.

Not quite. We are seeing job loses, reduced LHA rates, benefit cuts etc etc etc. How you can equate any of those to an INCREASED ability to pay rent is a mystery.

Wee_Willy_Harris

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.

So, as you say, as rents increase, so does the purchase price. ie for any new investor, higher rents are not a gain. However, we are now going to see the changes to LHA (as well as the impact of other cuts) start to effect the bottom of the rental sector. This, inevitably, will effect the value of properties to FTB in exactly the way you describe, at just the time when the harsh lending rules are starting to be eased a little. So prices become affordable, money becomes obtainable, more owner occs, less renters, and those that remain are predominently the ones who would never have got onto the ownership ladder when times were easy. Welcome to renting to chavs for beginners. The BTL foundations are looking a bit weaker all of a sudden.

HAMISH_MCTAVISH

Wee_Willy_Harris wrote: »

Not quite. We are seeing job loses, reduced LHA rates, benefit cuts etc etc etc. How you can equate any of those to an INCREASED ability to pay rent is a mystery.

The proof is in the fact that rents are rising.

Wee_Willy_Harris

HAMISH_MCTAVISH wrote: »

The proof is in the fact that rents are rising.

No. That would be putting the cart before the horse. I'll try and make it simple for you, as I can see comprehension isn't your strong point. Higher rents will never increase the ability to pay. In fact, they will do the opposite. Rent increases to not negate that statement. It's much easier to pay your rent if it is £20 a week than if it were £200. Is that simple enough for you? Or shall I get the crayons out?

IveSeenTheLight

Wee_Willy_Harris wrote: »

Well, no. We still have the BTL brigade convinced that the rent from one property can fund another, and so on, as they build their "property empire". So......

Let's say your rent to your landlord is £300 and that leaves you with £300 to spend. Your landlord now has £300 to spend on the BTL mortgage down the road and you have £300 to spend in the economy. Total available spend in the economy = £300.

Let's say your rent to your landlord is £600 and that leaves you with £0 to spend. Your landlord now has £600 to spend on the BTL mortgage down the road and you have £0 to spend in the economy. Total available spend in the economy = £0.

Are you forgetting about the rent from the BTL down the road?