Demand for rented accomodation rises

julieq

http://www.bbc.co.uk/news/business-14135553

Which is as predicted really. With a shortfall between number of households being created and homes built, overall demand for housing increases. As it's difficult to buy because of mortgage rationing, the only outcome is increased demand for rented housing.

doire_2

Its easy to buy. Just save. Problem solved.

Graham_Devon

You mean to say there is less demand to buy houses? Like....as predicted?

peakoil_2

its wednesday today, as predicted.

geneer

Look everyone. People who decide not to buy must rent instead.....as we might have predicted if it wasn't so self evident.

HAMISH_MCTAVISH

doire wrote: »

Its easy to buy if you live rent free in your mum's spare room and don't have to pay rents that are now higher than mortgage interest in 80% of the UK. Just save. Problem solved.

Fixed that for you.

julieq

There is more demand for houses generally.

I know the bears find this difficult to grasp, but every house that is rented is owned by someone. If you increase the returns available from the rented sector, there is more competition for houses for BTL and prices are sustained or rise via sales to landlords. Demand for rented accomodation is indirect demand for purchases. It's idiotic to say that because more people are renting and fewer people are owner occupiers therefore purchase prices go down, unless people are renting houses that belong to no-one. Geneer is chief cheerleader for the idiotic, because he's yet to figure out that increased demand for housing increases the value of housing directly or indirectly.

When the cork comes out of the bottle and those currently renting save enough for a deposit, competition is going to rise significantly for owner occupied properties too, UNLESS we build drastically increased quantities of houses (or more probably flats).

doire_2

HAMISH_MCTAVISH wrote: »

Fixed that for you.

Hamish you need to lighten up. Even when you attempt to be funny you still feel the need to add in a statistic

HAMISH_MCTAVISH

Some interesting excerpts from the article.

-74% of its members had more prospective tenants than homes to let.

-Two years ago a similar survey found only 10% of letting agents had an over-supply of would-be tenants.

- Andrews letting agents in Bristol, said: "We are seeing an average seven prospective tenants for every rental property available, and even more for three and four-bedroom family properties."

-The problem is most acute in central London, where 82% of ARLA members said they had a surplus of prospective tenants, compared with just 8% two years ago.

-The growth in demand for rented property was also seen last week in the findings of the English Housing Survey, published by the Department of Communities and Local Government (DCLG).

-It revealed that between 2005 and 2009-10 the number of people renting homes privately in England had risen by 1 million to 3.4 million - a rise of 40% in that time.

-The Council of Mortgage Lenders (CML) said: "Private renting had grown to account for 16% of households, while 17% rented from social landlords."

Jegersmart

julieq wrote: »

There is more demand for houses generally.

I know the bears find this difficult to grasp, but every house that is rented is owned by someone. If you increase the returns available from the rented sector, there is more competition for houses for BTL and prices are sustained or rise via sales to landlords. Demand for rented accomodation is indirect demand for purchases. It's idiotic to say that because more people are renting and fewer people are owner occupiers therefore purchase prices go down, unless people are renting houses that belong to no-one. Geneer is chief cheerleader for the idiotic, because he's yet to figure out that increased demand for housing increases the value of housing directly or indirectly.

When the cork comes out of the bottle and those currently renting save enough for a deposit, competition is going to rise significantly for owner occupied properties too, UNLESS we build drastically increased quantities of houses (or more probably flats).

It is a little more complex than that and a few ways to look at this. Rents are going up - that certainly is a fact - but lets look at it from another angle:


1. Less people can afford to buy a house so they rent instead. More renters need more houses - demand for houses must therefore go up? Sure, that is one scenario but the market will take the path of least resistance - another fact. Could it be that because more people are renting because they cannot actually afford to buy a house that in fact those prices will fall because it is easier for that to happen than for someone else to take on more debt in the current environment in order to create the demand you talk about?
2. Interest rates will rise - this is as close to a fact as a future event could be. What happens to BTL'ers then? Can they increase rents to cover their mortgages when the people already renting already cannot afford to buy? What happens to the BTL'ers risk? In this scenario you could argue many different ways but one is that there is an increase in property price temporarily until renter demand is weakened and then the bubble bursts?

No one can know what will happen but we need to keep a completely objective view in order to react or deal with changes when they happen. I have never found that using sarcasm makes anything more real or true - but as long as you are willing to keep a completely open mind it shouldn't cause too many problems for you. The need to be right should also be amputated immediately before anyone gets into trouble because of it:)

IMHO, DYOR

heathcote123

HAMISH_MCTAVISH wrote: »

Fixed that for you.

Yes, I think this 'it's easy to save for a mortgage when you're already payings someone elses' is a little overdone.