MSE News: Rents surge through £700 barrier

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Average rents continue to rise, as a shortage of homes and mortgage constraints fuelled tenant demand..."

Read the full story:
Rents surge through £700 barrier

Caveat_Mortgagor

Hmmmm, estate agency chain says renting is expensive, perhaps you should buy. Maybe they are getting desperate. I'm sure some will be scared by this so I have no doubt some poor !!!!!!s will make a very expensive mistake.

On the other hand, you could say 'chain of letting agents desperately trying to justify their rental asking prices!'

PS love use of the word surge as in 'Surge through £700 barrier'. The figure quoted is £701 :rotfl:

On an annual basis this figure is lower than the rate of inflation. In real terms rents are falling. Bet they dont mention that to the poeple they try to sucker into BTL!

FWIW my rent has fallen by 23% in real terms during the 4 years Ive lived here!

And based on the price an identical house has sold for round the corner, landlords investment is 30% down in real terms against the price he paid just before we moved in.

I shouldnt laugh though, the landlord has been good enough to sort out the 2 different occurances of burst pipes, the new kitchen ceiling, new carpet and new oven that we've needed. If this was twitter I would finish with #badinvestmentdecision

King_Of_Bling

WOW, better get me one of those BTL things

spikyone

Caveat_Mortgagor wrote: »

On an annual basis this figure is lower than the rate of inflation. In real terms rents are falling

What a ridiculous suggestion - why would you measure it against RPI/CPI inflation? Wage inflation is <2.5% and and savings rates are also, in the vast majority of cases, below the quoted 4.1% annual increase. Rents are becoming less affordable, so in real terms they are increasing.

My current landlord asked for a 5% increase for the coming year in line with RPI :eek:. Thankfully I was planning to leave anyway, and couldn't be bothered pointing out that they were just being greedy. It does explain why the place was already expensive (I only took it in the first place as I needed somewhere at short notice).

And before any landlords suggest that rents should increase in line with inflation because it's their income - see my first paragraph. We're all having our money squeezed, but most of us don't have multiple properties among our assets...

spikyone

@Caveat Mortgagor - I will applaud your choice of username though :T:rotfl:

Caveat_Mortgagor

spikyone wrote: »

What a ridiculous suggestion - why would you measure it against RPI/CPI inflation? Wage inflation is <2.5% and and savings rates are also, in the vast majority of cases, below the quoted 4.1% annual increase. Rents are becoming less affordable, so in real terms they are increasing.

I agree completely with what you say - apart from the ridiculous bit. The landlords return is falling in real terms.

News items put out such as this one are designed to scare people into buying or force the arm of someone negotiating a rent payment as well as encourage people into btl.

The comment I made adressed the third of those issues - btl. I merely pointed out that from a btl perspective, this is not good news as real returns are falling.

Breast_Cancer_Survivor

So rents are going up but LHA is going down. :think:

It's ok for those those lucky enough to have Social housing but how are people going to be able to afford to rent privately if they have a low paid job let alone those out of work & reliant on benefits?

breadlinebetty

Rents have certainly risen round my way and I've heard of some viewers offering more than the rental price if they really like it. Amazing.

claire16c

Reports like this remind me how expensive it is to live in the South East. You'd be lucky to get a studio or 1 bed for 700 where I live.

Mobeer

Please explain why £700 is a "barrier"

HAMISH_MCTAVISH

"We've had five successive months of rent rises, but there is no sign of a let-up anytime soon. Despite several new deals on the market, securing a big enough mortgage remains a tall order for the average buyer. The climbing cost of living and renting is impacting how much renters can save for their deposit, and demand will remain high in short-term.

"In the long term, there is an even smaller chance of a significant slowdown. Just 102,570 new homes were completed last year – at a time when the UK's population increased by nearly half a million. This trend shows no signs of slowing. Excess demand will be driven into the private rental sector driving rents up further. Landlords thinking long-term will do well."

Absolutely inevitable.

Rents are soaring, and will continue to soar.

Record low house building, record high population growth, and the mortgage famine ensuring building won't be coming to the rescue any time soon. After all, builders won't build what they can't sell.

So a generation of youngsters are forced to enrich their landlords, whilst prices stagnate before eventually rising driven by an influx of investment capital attracted by soaring rents. (BTL lending the only category rising, up markedly last year)